| A | B |
|---|
| personal loans | type of credit that is typically started at the time of purchase for a specific asset |
| down payment | a required portion of the purchase price paid at the time of purchase |
| secured loan | a loan that has some asset pledged against the loan |
| annual percentage rate (APR) | the rate that factors in all the financing costs so that borrowers know exactly what they are paying and can make informed decisions |
| unsecured loans | loans that have no collateral pledged against the loan |
| collateral | assets that have been pledged against loan repayment |
| mortgage | type of loan taken out to obtain a home |
| home equity loan | allows a homeowner to borrow against the equity in his or her home |
| home equity | the difference between the home's value and the amount owed to a lender |
| subprime mortgage | higher interest rate mortgage loans made to people with poor credit scores |
| fixed rate mortgage | interest rate remains the same for the life of the loan |
| adjustable rate mortgage | the interest rate may go up or down over time |
| teaser rate | an extremely low interest rate for a short period of time |
| subprime mortgage | higher interest rate mortgage loans made to people with poor credit scores |
| line of credit | an agreement to allow borrowing as needed up to a certain amount of money |
| policy riders | additional insurance coverage to cover things such as jewelry or valuable heirlooms that are often not fully covered by a typical insurance policy |
| Federal Stafford loans | the most common type of federal education loans |
| subsidized Stafford loans | need-based loans--applicants must show a certain level of financial need in order to qualify and interest does not build up on these loans while the student is in school |
| unsubsidized Stafford loans | loans are not need-based and interest accrues on these loans while you are in school |
| Federal Perkins loans | loans for students with "exceptional" financial needs which carry a lower interest rate and offer a longer grace period before students have to begin repayment |
| lease | a long-term rental agreement |
| auto liability coverage | insurance that covers you against the loss of your car |
| bodily injury liability coverage | insurance that covers the cost you may be responsible for if you are deemed to be at fault in a accident that injures or kills someone |
| property damage liability | insurance that will cover repairs to someone's vehicle if you are at fault |
| cosigner | someone other than the borrower who agrees to sign the loan document and to repay the loan if the original borrower stops making payments |
| terms of the loan | a repayment schedule that would spell out the details of the loan |
| defaults on the loan | to stop making payments on the loan |
| cash inflows and outflows | shows whether you have any assets that you might be able to sell in order to repay the loan |
