Loan Vocabulary

An agreement where you are credited with a fixed amount of money for a fixed period of time, usually with interest.

• installment

• lease

• term

• loan

The amount of time you have to repay your entire loan.

• term

• lease

• installment

• mortgage

A contract (often used for cars or property) by which one party allows another to use property for a specified time, usually in return for a periodic payment

• term

• installment

• lease

• loan

Loan used to finance a specific purchase for a specific amount of time, during which regular payments pay the accrued interest and a portion of the principal

• lease

• installment

• term

• peer-to-peer lending

A loan by individuals and businesses to make real estate purchases without paying the entire value of the purchase up front.

• mortgage

• shortage

• down payment

• collateral

A home loan in which the initial interest rate is normally fixed for a specified period of time after which it is reset periodically, often every month.

• collateral

• down payment

• adjustable rate mortgage

• term

Debt not tied to a specific asset, making it difficult or impossible for the lender to repossess items if payments are not made.

• partial debt

• secured debt

• full time debt

• unsecured debt

Debt tied to a specific tangible asset that can be used as collateral and repossessed if payments are not made.

• secured debt

• unsecured debt

• peer-to-peer debt

• home equity

A method of debt financing that enables individuals to borrow and lend money without the use of a financial institution as an intermediary.

• installment

• unsecured debt

• home equity

• peer-to-peer lending

The value of ownership built up in a home or property that represents the current market value of the house minus any remaining mortgage payments.

• lease

• home equity

• secured debt

• collateral