EPF 2.4 Review

item of value offered as a guarantee that a borrower will pay back a loan; houses and cars are common collateral

• collateral
• installment credit
• secured credit
• bankruptcy

legal process to eliminate an individual or business's debt

• bankruptcy
• home equity line of credit
• secured credit
• foreclosure

stored value of an asset; for example, if a home valued at $150,000 had $40,000 paid on it, the equity is the $40,000

• equity
• installment credit
• bankruptcy
• secured credit

loan on the equity of the home that can be used like a credit card on a revolving basis

• home equity line of credit
• collateral
• unsecured credit
• bankruptcy

loan that has no collateral

• unsecured credit
• revolving credit
• collateral
• equity

when a mortgage is not paid, the lender can take possession of the home and re-sell it to recover their investment

• foreclosure
• bankruptcy
• installment credit
• revolving credit

loan with collateral offered as security for payment

• secured credit
• unsecured credit
• collateral
• revolving credit

credit that is based on a fixed limit and charges are made on a continuing basis; credit cards are an example

• revolving credit
• collateral
• installment credit
• foreclosure

credit where the total amount of the loan is divided over a fixed time period into equal monthly payments

• installment credit
• bankruptcy
• secured credit
• equity