3.2 Loans Vocab

(a)   - an agreement that states the terms of the loan

• Promissory Note
• Collateral
• Principal
• Cosigner

​ ​ (a)   - the amount​ borrowed

• Principal
• Interest
• Discount
• Tax

​ (a)   (APR) - the interest rate you pay per year

• Annual Percentage Rate
• Interest
• Life Insurance
• Collateral

​ (a)   - the person who agrees to pay back the loan if the borrower is unable to do so

• Cosigner
• Principal
• Collateral
• Wage Assignment

​ (a)   - a type of insurance that pays a specified amount upon the policy holders death

• Life Insurance
• Medical Insurance
• Auto Insurance
• Pet Insurance

​ (a)   - allows the borrower to make payments before the due date to reduce the amount of interest

• Prepayment Privilege
• Wage Assignment
• Wage Garnishment
• Balloon Payment

​ Voluntary deductions from an employee's paycheck, used to pay off debts

• Wage Garnishment

• Wage Assignment

• Balloon Paycheck

• Collateral

The employer deducts money from the employee's paycheck to pay the creditor.

• Lending Institutions

• Prepayment Privilege

• Balloon Payment

• Wage Garnishment

The last monthly payment on some loans that is much higher than the previous payments.

• Balloon Payment

• Collateral

• Promissory Note

• Wage Assignment

Organizations that extend loans are called ​ (a)   .

• lending institutions
• principal
• collateral
• money