Credit Basics Vocab

Front

Principal

Back

Amount of the loan.

Front

Collateral

Back

Offering property to secure a loan.

Front

Co-Signer

Back

Someone with good credit and property that signs on your behalf to secure a loan.

Front

Credit

Back

Privilege of using someone else’s money for a time.

Front

Debtor

Back

Buys on credit or receives a loan.

Front

Creditor

Back

Anyone who sells credit or makes a loan.

Front

Three C’s of Credit

Back

Character, Capacity, Capital

Front

Loan

Back

A sum of money borrowed, expected to be repaid with interest.

Front

Fixed Interest Rate

Back

Interest rate remains constant throughout the loan.

Front

Variable Interest Rate

Back

Interest can change over the loan's life.