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credit
receipt of money either directly or indirectly to buy goods and services in the present with the promise to pay for them in the future
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principal
amount of money originally borrowed in a loan
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interest
amount of money the borrower must pay for the use of someone else's money
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installment debt
type of loan repaid withe equal payments, or installments , over a specific period of time
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durable goods
manufactured items that have a life span longer than three years
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mortgage
installment debt owned on houses, buildings, or land
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commercial bank
bank whose main functions are to accept deposits, lend money, and transfer funds among banks, individuals, and businesses
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savings and loan association (S&L)
depository institution that accepts deposits and lents money
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savings bank
depository institution originally set up to serve small savers overlooked my commercial banks
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credit union
- depository institution owned and operated by its members to provide savings accounts and
- low-interest loans only to its members
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finance company
company that takes over contracts for installment debts from stores and adds a fee for collecting the debt; a consumer finance company makes loans directly to consumers at high rates of interest
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charge account
credit extended to a consumer allowing the consumer to buy goods or services from a particular company and to pay for them later
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credit card
credit device that allows a person to make purchases at many kind of stores, restaurants, and other businesses without paying cash
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finance charge
cost of credit expressed monthly in dollars and cents
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annual percentage rate (APR)
cost of credit expressed as a yearly percentage
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credit bureau
private business that investigates a person to determine the risk involved in lending money to that person
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credit check
investigation of a person's income, current debts, personal life, and past history of borrowing and repaying debts
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credit rating
rating of the risk involved in lending money to a specific person or business
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collateral
something of value that a borrower lets the lender claim if a loan is not repaid
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secured loan
loan that is backed up by collateral
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unsecured loan
loan guaranteed only by a promise to repay it
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usury law
law restricting the amount of interest that can be charged for credit
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bankruptcy
the inability to pay debts based on the income recieved
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