6.2 Banking Flashcard

Front

What is a "secured loan" and what are its key characteristics?

Back

A loan that requires collateral and has lower interest rates.

Front

What does FDIC stand for?

Back

Federal Deposit Insurance Corporation

Front

What does NCUA stand for?

Back

National Credit Union Administration

Front

What does "collateral" mean in the context of borrowing?

Back

An asset pledged for a loan

Front

Define "APR" and discuss how it influences the cost of borrowing.

Back

APR stands for Annual Percentage Rate and it represents the annual cost of borrowing including interest and fees.

Front

What is a "credit score," and how is it calculated?

Back

A numerical expression based on a level analysis of a person's credit files, representing the creditworthiness of an individual.

Front

What is an "installment loan"?

Back

A loan that is repaid over time with a set number of scheduled payments

Front

What is "predatory lending," and how can consumers protect themselves from it?

Back

A type of lending that imposes unfair or abusive loan terms on borrowers.

Front

What is a "line of credit" and what are its advantages and disadvantages?

Back

A line of credit is a flexible loan arrangement allowing borrowers to access funds as needed, offering flexibility but potentially higher interest rates.

Front

How does a line of credit differ from other forms of borrowing?

Back

A line of credit allows for flexible borrowing up to a limit, unlike a fixed loan.