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Borrowing Money
Terms associated with Chapter 5 in "On Your Own" Budgeting Simulation.
23
Finance
12th Grade
12/15/2011

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Term
Alimony
Definition
a financial amount paid to one's former spouse for support after a legal separation or divorce
Term
Assets
Definition
any items of value that a person owns
Term
bankrupt
Definition
financial situation in which a court declares one's debts to be greater than the total value of one's assets
Term
cash value
Definition
amount that an insurance policy is worth if canceled before maturity. An insurance company will lend to a policyholder based on his or her policy
Term
coapplicant, joint applicant, cosigner
Definition
someone who signs a loan with the borrower, thus accepting legal responsibility for paying the debt if the borrower defaults (does not pay)
Term
co-ownership
Definition
joint ownership between two or more persons
Term
creditor
Definition
lender; one to whom money is owed
Term
credit references
Definition
people who will recommend the credit applicant as a good credit risk
Term
debt
Definition
money owed
Term
debt balance
Definition
amount still owed on a debt at a given time
Term
default
Definition
failure to fulfill the terms of the loan agreement
Term
dependents
Definition
those who rely one a person for support
Term
finance charge
Definition
the total cost to use credit, including interest, loan fees, and credit insurance
Term
interest
Definition
the amount paid for the use of borrowed money
Term
interest rate
Definition
the percentage of the principal that a borrower pays for the use of the borrowed money
Term
liabilities
Definition
financial obligations; amounts owed
Term
mortgage
Definition
a loan for purchasing real estate. If the borrower does not repay the loan according to the terms of the contract, the lender can legally force the sale of the property to pay off the loan.
Term
mortgage holder
Definition
person or institution that made the mortgage loan
Term
proceeds
Definition
the amount of money a borrower receives from a loan
Term
real estate
Definition
land and property attached to the land
Term
repossess, reclaim
Definition
to take back what was sold on an installment plan or loan if payments are not made as agreed
Term
Rule of 78
Definition
a method of calculating interest by which the borrower pays more interest during the early months of a loan and less at the end of the loan period
Term
securities
Definition
stocks and bonds
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