Lesson 4.1

Key Term

Debt: money owed to another person or company

Lesson 4.2

Key Terms

Revolving Credit: credit that automatically renews whenever a payment is made to reduce the debt
Collateral: something owned (that has value) offered as security on a debt; if the debt is not repaid as agreed, the item is forfeited to the lender
Lien: a legal claim against (or right to own) an asset until the debt (loan) is repaid​​​​​​​
Appreciating Asset: an asset that increases in value over time​​​​​​​
Equity: the increase in value of a home over time; the difference between the amount owed and what the home could be sold for​​​​​​​
Default: failure to repay a loan on time​​​​​​​
Installment Credit: a loan for a fixed amount of money that‘s paid back in monthly installments 
Depreciating Asset: an asset that loses value over time, such as a car that’s worth less every year​​​​​​​
Predatory Lending: a lender who uses deceptive, unfair, or fraudulent practices on borrowers who are desperate for cash

Lesson 4.3

Key Terms

Credit Score: a statistical number used to represent a consumer‘s creditworthiness
Credit Bureau: a company that collects credit rating information and makes it available to creditors

Lesson 4.4

Key Terms

No Vocabulary

Lesson 4.5

Key Terms

Principal: the original amount of a loan; the total amount borrowed before interest
Interest: the additional cost a lender charges for borrowing their money​​​​​​​
Term: the amount of time, in months, that you’ll be making payments​​​​​​​
Depreciation: the loss of value of an asset over time​​​​​​​
Negative Equity: when the value of an asset falls below what is owed on it

Lesson 4.6

Key Terms

No Vocabulary