AP®︎ Business with Personal Finance: Topic 3.2 Flashcards

Money borrowed and repaid under agreed terms, ordinarily with interest and any applicable fees

The amount still owed to a lender; a personal liability requiring future payments

The original amount of money borrowed

The price paid for using a lender’s money

The rate charged for the use of borrowed money

The conditions establishing how and when principal, interest, and fees must be paid

The ability to receive money, goods, or services now under an agreement to pay later

A specific amount borrowed and repaid through scheduled payments over a set term

Credit that permits repeated borrowing up to a limit, with payments restoring available credit

An arrangement in which a consumer receives a service before the related bill is due

A loan backed by an asset the lender may claim if the borrower defaults, usually resulting in a lower interest rate

A loan not backed by specific collateral, generally carrying a higher interest rate because lender recovery is less certain

A standardized annual measure used to communicate and compare the cost of credit

The dollar cost of credit identified in required lending disclosures

Income or savings used to pay part of a major purchase at purchase, reducing the amount financed

Nontraditional financial providers or products offering services or fast credit, often at high fees or interest rates

A small, high-cost, short-term loan expected to be repaid from the borrower’s next paycheck

A product providing early access to an expected tax refund in exchange for fees or other charges

Failure to meet the repayment obligations in a credit agreement

A lender’s assessment of how likely a potential borrower is to repay as agreed

A record of a consumer’s credit accounts, balances, payment history, inquiries, and related information compiled by a credit bureau

An organization that collects consumer credit information and compiles credit reports

A numerical estimate of credit risk based on information about a consumer’s past use and repayment of credit

The percentage of available revolving credit currently being used

Make required payments on every debt and direct extra money to the highest-interest debt, then repeat with the next-highest rate

Replacing an existing loan with a new loan, potentially to obtain a better rate, fee structure, or payment schedule

Combining multiple debts into one new obligation

An arrangement in which a consumer makes one payment to a counseling organization that distributes funds to creditors under agreed terms

A legal process that may discharge some debts and establish a supervised repayment plan for others

A law requiring covered lenders to disclose important credit costs and terms in a standardized form

A law prohibiting creditors from discriminating in credit decisions on legally protected grounds

A law governing the collection, accuracy, access, use, and permitted sharing of consumer credit information

A law restricting abusive, deceptive, and unfair conduct by covered third-party debt collectors

A loan whose interest rate ordinarily remains unchanged for the stated term

A loan whose interest rate, and potentially its payment, can change according to the contract and an underlying benchmark