4.2 Vocab Flashcards
revolving credit
credit that automatically renews whenever a payment is made to reduce the debt
credit that automatically renews whenever a payment is made to reduce the debt
revolving credit
collateral
something owned (that has value) offered as security on a debt; if the debt is not repaid as agreed, the item is forfeited to the lender
something owned (that has value) offered as security on a debt; if the debt is not repaid as agreed, the item is forfeited to the lender
collateral
lien
a legal claim against (or right to own) an asset until the debt (loan) is repaid
a legal claim against (or right to own) an asset until the debt (loan) is repaid
lien
appreciating asset
an asset that increases in value over time
an asset that increases in value over time
appreciating asset
equity
the increase in value of a home over time; the difference between the amount owed and what the home could be sold for
the increase in value of a home over time; the difference between the amount owed and what the home could be sold for
equity
default
failure to repay a loan on time
failure to repay a loan on time
default
installment credit
a loan for a fixed amount of money that’s paid back in monthly installments
a loan for a fixed amount of money that’s paid back in monthly installments
installment credit
depreciating asset
an asset that loses value over time, such as a car that’s worth less every year
