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Flashcards in Chapter 5 Deck (28)
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1
Q

Amount you are borrowing

A

Principle

2
Q

Percentage (usually per year) charged to borrow

A

Interest

3
Q

The amount of time of investment, agreement, ect.

A

Term

4
Q

Requires collateral - lender can take it if you don’t pay, safer for the lender and offers lower interest rate.

A

Secured

5
Q

used to finance a specific amount of time. Regular payment made to payments are made to pay the interest and the principle.

A

Installment loans

6
Q

an open line of credit that can be used for any purchases as long as you’re under the credit limit.

A

Revolving credit

7
Q

debt is tied to a specific asset that can be used as collateral and repossessed if the borrower doesn’t make payments.

A

Secured debt

8
Q

interest rate can change during the duration of the loan based on the prime rate or an index rate.

A

Variable- Rate

9
Q

debt is not tied to a specific asset; there is no collateral that can be repossessed if borrower defaults.

A

Unsecured Debt

10
Q

interest rate remains constant during the duration of the loan.

A

Fixed - Rate

11
Q

Amount of money you can borrow to pay back later.

A

Line of Credit

12
Q

The amount you still owe after have made your most recent payment.

A

Outstanding balance

13
Q

Federal student loans will default to the standard plan, Which has a term of ____ years

A

10

14
Q

initial payment made to the creditor that lowers your total debt

A

Down payment

15
Q

what is the typical grace period for a credit card in days

A

20 - 30

16
Q

Federal student loan that the government pays interest on while you are enrolled as a full-time student

A

Subsidized

17
Q

This financial item, tied to your checking account, WILL NOT help build your credit score.

A

Debit Card

18
Q

A person added to a credit card account by the primary cardholder

A

Authorized user

19
Q

which transaction types DECREASES how much you owe the credit card company.

A

Payment

20
Q

Grace Period for student loans, in months.

A

6

21
Q

When loans are amortized, monthly payments are:

A

Constant

22
Q

someone who agrees to take on the responsibility of repayment if the loan goes unpaid.

A

Cosigner

23
Q

When loans are amortized, the interest portion of the monthly payment ______ over time.

A

decreases

24
Q

When loans are amortized, the principle portion of the monthly payment _____ over time.

A

Increases

25
Q

The shorter your term length, the (higher/lower) your monthly payments.

A

higher

26
Q

The shorter your term length, the (higher/lower) the total interest you will pay.

A

lower

27
Q

What is required to be considered “up to date” with your credit card.

A

minimum payment

28
Q

gradually write off the initial cost of (an asset) over a period.

A

Amortized