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Financial Math: Personal Finance > Quiz 3.1 - 3.4 > Flashcards

Quiz 3.1 - 3.4 Flashcards

1
Q

Credit

A

Purchasing something that you don’t pay for immediately

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2
Q

Creditor

A

An organization or person that extends credit to a consumer

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3
Q

Debtor

A

A person who uses credit

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4
Q

Assets

A

Everything you own (home, car, bank account, etc.)

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5
Q

Earning Power

A

Your ability to earn money now and in the future (want to have enough income to repay debt)

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6
Q

Credit Reporting Agency

A

Compiles records on all users of credit. Gives to creditors before debtors can use credit.

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7
Q

Credit Rating

A

Report card where creditor rates how well you met your financial obligations to a credit reporting agency

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8
Q

Fico Score

A

credit score ranging from 300-850, summarizing the probability that debtors will repay their debts. 850 is good

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9
Q

Installment Plan

A

Paying for merch or service over a period of time

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10
Q

Down Payment

A

Initial amount paid on an installment plan at time of purchase

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11
Q

Deferred Payment Plans

A

Payment over a period of time but interest is not charged if everything is paid on time

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12
Q

Layaway Plans

A

Customer doesn’t receive the product until it is fully paid for

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13
Q

Promissory Note

A

Document that must be signed that details the conditions of a loan. Signing it is promising to pay back your loan

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14
Q

Principal

A

The initial loan amount that you borrow is the principle

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15
Q

APR

A

Annual Percentage Rate - interest rate you pay per year

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16
Q

Cosigner

A

Person who will pay back the loan if the borrower can’t

17
Q

Life Insurance

A

Covers the borrower’s loans in the event that the borrower dies

18
Q

Prepayment Privilege

A

allows borrowers to pay before the due date to reduce interest

19
Q

Prepayment Penalty

A

borrowers must pay a fee if they want to pay back the entire loan before the due date

20
Q

Wage Assignment

A

Voluntary deduction from employees paycheck used to pay off loans

21
Q

Wage Garnishment

A

involuntary form of wage assignment, usually ordered by the court

22
Q

Balloon Payment

A

Last monthly loan on some payments can be much higher than the rest

23
Q

Lending Institution

A

Organization that extends loans

24
Q

Collateral

A

Customer who needs money leaves a small personal belonging while they are paying off the loan

25
Q

Payday Loan

A

Loan taken for a short amount of time that borrower agrees to pay back once they receive their paycheck

26
Q

Career Schools

A

Institutions that provide students with skills for specific jobs

27
Q

Free Application for Federal Student Aid (FAFSA)

A

Will faciliate loans for students

28
Q

Student Aid Report

A

Will indicate expected family contribution as well as other information about loans that you could take out

29
Q

Federal Loan

A

Funded by the Federal Government

30
Q

Private Loan

A

issued by a bank, credit union, school, or even state agency.

31
Q

Federal Direct Subsidized Loan (Stafford)

A

Need based. Students can defer interest payments for a period of time. Students receive a six month grace period after school before they need to begin paying on the loan. Government pays the loans while the student is in school and during the six month period

32
Q

Federal Direct Unsubsidized Loan

A

Non-Need based and interest on the loan is expected to be paid from the time it is taken out. No payment required while you’re in school or in the six months after graduation

33
Q

Federal PLUS Loan (Parent Loan for Undergraduate Students)

A

allows parents (or grad students) to borrow money for college expenses

34
Q

Federal Perkins Loan

A

loans for students with high financial need

35
Q

Default

A

When a borrower fails to pay a loan on the schedule that was set for them

Financial Math: Personal Finance (2 decks)

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