Personal Finance Loan Vocabulary 1

Ranges from 300 to 850. A good score is at least 670.

• Fixed Interest Rate

• Loan Amortization

• Credit Score

• APR

An individual who agrees to sign a loan to help someone with a lower 

credit score or no credit history qualify for a loan.

• Co-Signer

• Borrower

• Co-Borrower

• Grace Period

The interest rate remains the same for the duration of the loan.

• Loan Amortization

• Variable Interest Rate

• APR

• Fixed Interest Rate

When someone agrees to be jointly responsible for paying back a loan 

with you.

• APR

• Co-Borrower

• Borrower

• Co-Signer

When the borrower isn’t responsible for making repayments, however, interest usually accrues.

• Grace Period

• Fixed Interest Rates

• Installment Loan

• Co-Signer

When a borrower doesn’t pay back the loan as promised.

• Hard Credit Check

• Installment Loan

• Default

• Grace Period

What a lender does when you apply for a loan.  It may drop your credit score.  Remains on your credit report from 12 months to 2 years. 

• Loan Amortization

• Installment Loan

• Grace Period

• Hard Credit Check

The person that applies for a loan and receives funds.

• Co-Signer

• Borrower

• Co-Borrower

• Hard Credit Check

A loan with a fixed repayment period listed in the loan agreement, usually monthly.

• Installment Loan

• Loan Amortization

• Hard Credit Check

• Fixed Interest Rate

The total yearly cost of taking out a loan.

• Hard Credit Check

• Loan Amortization

• Installment Loan

• APR