Financial glossary

Annual Percentage Rate. The yearly cost of borrowing including certain fees.

Annual Percentage Yield. The yearly rate that reflects compounding on deposits.

The schedule of loan repayment split between principal and interest.

An asset pledged to secure a loan.

The share of your available credit that you use.

A measure lenders use to compare debt payments to income.

The portion of an asset that you actually own.

A widely used credit scoring model in the U.S.

An interest rate that does not change during a specified period.

A rate that can move with an index or benchmark.

Extra time to pay without interest or penalties.

A fee charged by a lender to process a new loan.

Replacing an existing loan with a new one, often to change the rate/term.

A loan backed by collateral.

A loan not backed by collateral.

The lender’s process of evaluating risk.

Interest calculated on both principal and accumulated interest.

Interest calculated only on principal.

The lowest amount you must pay on a credit account to remain current.

When a creditor writes off a seriously delinquent debt.

Being late or past due on a payment.