(Mostly!) AI Generated! Credit and Finance Glossary
- APR (Annual Percentage Rate)
- The yearly interest rate charged on borrowed money, like when you use a credit card or take out a loan.
- Asset
- Anything valuable that you own, like cash, a car, a house, or even intellectual property.
- Balance
- The amount of money you have in an account, both positive or negative. Includes bank accounts and amounts owed on loans or credit cards.
- Bankruptcy
- A legal process where a person or entity that cannot pay debts can get a fresh start, though it seriously affects credit.
- Checks
- A paper document issued by a bank account holder instructing the bank to pay a specific amount to a person or entity.
- Checking Account
- A bank account used to receive and spend money daily, usually comes with a debit card and supports electronic payments.
- Credit Score
- A number that shows how trustworthy you are at paying back money you borrow. Higher scores indicate better reliability to lenders.
- Collateral
- Something valuable you promise to a lender if you can't repay a loan, like a car or a house.
- Debt
- Money you owe to someone else, such as a lender.
- Default
- Failing to pay back a loan as agreed.
- Equity
- The value of an asset you own minus any money you still owe on it. Example: A $100,000 house with $50,000 owed has 50% equity.
- Foreclosure
- When a lender takes back a property because it is in default.
- Fixed Rate
- An interest rate that stays the same for the entire loan period.
- Interest
- The extra money you pay when borrowing or earn when saving.
- Liability
- Your legal responsibility for a debt or obligation.
- Loan
- Money borrowed that must be paid back, usually with interest.
- Mortgage
- A loan specifically for buying a house or real estate, where the property itself is collateral.
- Principal
- The original amount of money borrowed or invested, not including interest or fees.
- Profit
- The value remaining after subtracting all costs from a transaction.
- Refinance
- Getting a new loan to replace an old one, usually for a better interest rate.
- Repossession
- When a lender seizes collateral on a loan.
- Risk
- The chance you might lose value on an investment.
- Savings Account
- A bank account where money is stored long-term and typically earns interest.
- Stock
- A share in ownership of a company, which can increase or decrease in value.
- Term
- The length of time an account or agreement lasts, such as a loan repayment period.
- Transaction
- Any exchange of value, such as buying something or receiving payment for work.
- Unsecured Loan
- A loan without collateral, usually with higher interest because it is riskier for the lender.
- Variable Rate
- An interest rate that changes over time, usually based on the economy.
- Withdrawal
- Taking money or value out of an account.