Loan Fundamentals

Front

The original amount of money borrowed from the lender.

Back

principal

Front

The cost of borrowing this money is called __________. 

Back

interest

Front

A fee that is charged for making a loan is called _____________ __.

Back

origination fee

Front

A portion of this payment goes to the outstanding principal balance is called a ________

Back

principal payment

Front

An _____ _________ is the portion of a payment that covers the interest accrued on the loan.

Back

interest payment

Front

_________ is a valuable asset that will cover the cost of your loan in case you don't pay it back.

Back

collateral

Front

______ _______ are backed by collateral assets such as a home or a car.

Back

secured loans

Front

Which of the following is an example of a secured loan? student loan, Personal loan, Car lease, Mortgage

Back

Mortgage

Front

________ loans are not backed by collateral. They are, also, approved based on the borrower’s credit worthiness and income.

Back

unsecured

Front

A sum of money paid upfront when purchasing an expensive item such as a home or vehicle is called a _____ _____.

Back

down payment