Credit Vocabulary

The amount of money or something of value that is loaned out on trust with the expectation it will be repaid later

• Debt

• Credit

• Amortization

• Collateral

The entire amount of money a person owes to lenders.

• Debt

• Credit

• Amortization

• Collateral

Type of credit that has fixed payments with a set period of time to repay (loans)

• Payday Loan

• Collateral

• Installment

• Revolving

Type of credit that has no stated payoff time, but has required minimum monthly payments (credit card)

• Payday Loan

• Collateral

• Installment

• Revolving

something pledged as security for repayment of a loan, to be forfeited in the event of a default

• Collateral

• Capital

• Capacity

• Character

your history and financial stability in the past to get a sense of how responsible you have been with credit

• Collateral

• Capital

• Capacity

• Character

The borrower's ability to pay back their loan

• Collateral

• Capital

• Capacity

• Character

Personal items of value that can be sold to pay for loan if you can't pay back a loan

• Collateral

• Capital

• Capacity

• Character

The maximum dollar amount that can be borrowed

• Annual Percentage Rate

• Term

• Credit Limit

• Universal Default

the interest rate charged on credit cards, IF you carry a balance

• Annual Percentage Rate

• Term

• Credit Limit

• Universal Default