Types of Credit Vocab

Original amount of money borrowed (the actual amount of money needed for the loan), separate from interest or fees

• Principal
• Interest Rate
• Term
• Secured loan/debt
• Variable rate loan

The rate charged for borrowing money usually expressed as a percent of the amount borrowed

• Interest Rate
• Principal
• Term
• Secured loan/debt
• Variable rate loan

The amount of time you have to repay your entire loan

• Term
• Principal
• Interest Rate
• Secured loan/debt
• Variable rate loan

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

• Secured loan/debt
• Principal
• Interest Rate
• Term
• Variable rate loan

a number assigned to a person that indicates to lenders their capacity to repay a loan.

• Credit Score
• Principal
• Interest Rate
• Term
• Secured loan/debt

A loan in which the interest rate can change, based on prime rate or index rate, over the course of the loan

• Variable rate loan
• Principal
• Interest Rate
• Term
• Secured loan/debt

the value of the assets a person or corporation owns, minus the liabilities they owe

• Net worth
• Credit Score
• Principal
• Interest Rate
• Term

a card that lets you spend money from your checking account without writing a check. You can use this to buy things in a store and get cash from an ATM.

• Debit card
• Principal
• Interest Rate
• Term
• Secured loan/debt

a card you can use to pay for things. You buy a card with money loaded on it. Then you can use the card to spend up to that amount.

• Prepaid card
• Principal
• Interest Rate
• Term
• Secured loan/debt

A plastic card that allows you to make purchases now with borrowed money, which then you must repay to the lender in one lump sum or in monthly payments with interest

• Credit card
• Principal
• Interest Rate
• Term
• Secured loan/debt