PERSONAL FINANCE (PREFINAL)

Money that a lender makes available to a borrower with the understanding that the borrower will repay the money in the future.

Fees charged by a lender on borrowed money.

The price one pays for the right to use another party's money and stated as a percentage of the amount borrowed.

Lower monthly payments.

Credit that is extended for a short term, such as 30 days or less.

Used for specific purchases but allows the borrower more time to repay the money

The amount of money outstanding on a loan

Allows consumers to borrow up to some preset maximum amount. An example would be a credit card.

A numeric score that uses your credit history to assess your creditworthiness.

When someone uses your personal information without your permission for personal gain.

This involves simply copying your credit card or debit card numbers from your cards.

When someone improperly accesses your personal information by posing as someone who needs data for one reason or another.

It is known when pretexting occurs online.

It is even more complex, uses e-mail viruses to redirect you from a legitimate web site to an official-looking web site designed to obtain your personal information

Type of credit that is typically started at the time of purchase for a specific asset.

Someone other than the borrower who agrees to sign the loan document and to repay the loan if the original borrower stops making payments.

The rate that factors in all the financing costs so that borrowers know exactly what they are paying and can make informed decisions.

A loan that has some asset pledged against the loan so that the lender is assured of winding up with some valuable asset if the borrower fails to pay off the loan.

Assets that have been pledged against loan repayment.

Loans that have no collateral pledged against the loan.

Type of loan taken out to obtain a home.

The interest rate remains the same for the life of the loan. This means the payment will never go up or down.

It is one where the rate may go up or down over time.

An extremely low interest rate for a short period of time that is used as a deal sweetener. It designed to make your first payments as low as possible and encourage you to take out a loan. It used on all types of loans including vehicle and home loans

It is higher interest rate mortgage loans made to people with poor credit scores.

Allows a homeowner to borrow against the equity in his or her home.

It is the difference between the home's value and the amount owed to a lender.

Additional insurance coverage to cover things such as jewelry or valuable heirlooms that are often not fully covered by a typical insurance policy.