| A | B |
|---|
| credit | a tool to buy something now and pay for it later. |
| microloans | short-term loans to help hardworking people fund businesses in low-income communities as part of a plan to reduce poverty. |
| interest | the amount you pay to use someone else's money, usually a % of the principal. |
| principal | money from a loan that is borrowed |
| simple interest formula | quick way to calculate interest. |
| I | interest |
| R | interest rate |
| T | time in years |
| P | principal |
| amortization calculation formula | lenders use this to figure out an average payment amount for each period, which is usually each month. |
| annual percentage rate | APR |
| fixed interest rates | stay the same for the life of the loan or account. |
| variable interest rates | change at specified times, such as every month or year. |
| maturity date | the final payment date of a loan |
| loan term | the amount of time you're obligated to make payments |
| annual fee | a yearly fee for havin an open account |
| cash advance fee | a fee for withdrawing cash on your credit accont |
| origination fee | a charge to process your loan. |
| prepayment penalty | extra charges if you make early payments |
| grace period | the amount of time before interest starts accumulating on charged purchases. |
| down payment | money you pay upfront toward the purchase to reduce the loan amount |
| debt | the total amount that a person owes to others |
| garnish | when a lender can take your money from your wages to collect on a debt. |
| revolving credit | lets you borrow up to a maximum dollar amount whenever you want. |
| cash loans | simply pay the borrowed funds directly to you. |
| service credit | lets you pay in full, usually monthly, for a service as charges add up. |
| authorized user | someone who is able to use the credit card account but is not legally liable for the balance due on the account |
| joint account holder | someone who is equally responsible for the balance of the account along with the other person named on the account and is legally liable for any amount due. |
| credit reports | lender's check on this to see how applicants have used credit in the past. |
| cosigner | agrees to repay the debt if you don't. |
