Consumer Credit & Loans Flashcards
Credit
Purchasing something that you do not pay for immediately.
Debtors
People who use credit.
Creditors
Organizations or people that extend credit to consumers.
Assets
Everything you own
Earning Power
The ability to earn money now and in the future.
Credit Rating
A credit report card that shows how well a user of credit meets financial obligations.
Finance Charge
The interest that is charged to a buyer when paying for a purchase.
FICO Score
A reliable way to judge credit worthiness.
Promissory Note
An agreement signed when borrowing money.
Cosigner
A person who agrees to pay back a loan if the borrower is unable to do so.
Prepayment Privilege
Allows the borrower to make payments before the due date to reduce the amount of interest.
Prepayment Penalty
Requires the borrower to pay a fee if they wish to pay back an entire loan before the due date.
Wage Assignment
A voluntary deduction from an employee’s paycheck, used to pay off debts.
Wage Garnishment
An involuntary deduction from an employee’s paycheck, often enforced by court order.
Ballon Payment
The last monthly payment on some loans can be much higher than the previous payments.
