Unit 2: Credit Quiz (Part 1 and 2)

Any arrangement where you get "stuff" (money, goods, services), and agree to pay for it in the future

An agreement where you are credited with a fixed amount (usually of money) for a fixed period of time, usually with interest

The percentage charged for the privilege of borrowing money

The amount you borrow

The amount of time you have to repay your principal

Something valuable that the lender can take as payment if you can't pay back your loan (like a house or car)

Someone who legally agrees to take responsibility for a person's debt if they cannot repay it

Loan used to finance a specific purchase for a specific amount of time; regular payments pay the interest and portion of the principal

Open line of credit that can be used for any purchases as long as you're under the limit; payments vary monthly based on size of the debt

Debt tied to a specific tangible asset that can be used as collateral and reposed if payments are no tmade

Debt NOT tied to a specific asset or that cannot be repossessed if payments are not made

Interest rate can change, based on prime rate or index rate, over the course of the loan

Interest rate is determined before loan is granted and remains constant as long as ontime payments are being made

The paying off of debt with a fixed repayment schedule in regular installments over a period of time

A member-owned financial co-operative. These institutions are similar to banks, except they are created and operated by their members and profits are shared amongst the owners.