PF study guide (1)

PF study guide
secured loan - CORRECT ANSWER-a loan that is backed by collateral that you own

lien - CORRECT ANSWER-the lender's right to claim the collateral until the loan is
paid

open-end loan - CORRECT ANSWER-a loan that doesn't have a specific date for
repayment and borrower loans.

APR - CORRECT ANSWER-the total cost of borrowing money that consumers rely
on to compare loans

loan - CORRECT ANSWER-an amount of money that consumers borrow from a
lender with the agreement it will be paid back

unsecured loan - CORRECT ANSWER-a type of loan that doesn't require collateral
from borrowers but instead lenders rely on credit reports and credit scores.

closed-ended loan - CORRECT ANSWER-a one time loan for a fixed amount and
borrowers make payments toward the balance

adjustable rate - CORRECT ANSWER-the interest rate that varies during the life of a
loan

interest - CORRECT ANSWER-the price borrowers pay to use the lender's money

collateral - CORRECT ANSWER-a financial asset

principal - CORRECT ANSWER-the amount of money borrowed

term - CORRECT ANSWER-the specified time the borrower is given to repay the
loan

co-signer - CORRECT ANSWER-someone who will take over the loan for a borrower
if the borrower fails to make payments

equity - CORRECT ANSWER-the difference between the value of a property and
how much is still owed on the mortgage of the property

default - CORRECT ANSWER-failure to pay back a loan

fixed rate - CORRECT ANSWER-an interest rate that remain the same while the
loan is being repaid