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15 Cards in this Set
- Front
- Back
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truth in lending law
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a federal law that requires creditors to disclose the annual percentage rate (APR) and the finance charge as a dollar amount
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finance charge
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the total dollar amount paid to use credit
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annual percentage rate (APR)
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the percentage cost (or relative cost) of credit on a yearly basis. the APR yields a true rate of interest for comparisons with other sources of credit
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simple interest
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interest computed on principal only and without compounding
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declining balance method
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a method of computing interest when more than one payment is made on a simple interest loan
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add-on interest method
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a method of computing interest in which interest is calculated on the full amount of the original principal
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adjusted balance method
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the assessment of finance charges after payments made during the billing period have been subtracted
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previous balance method
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a method of computing finance charges that gives no credit for payments made during the billing period
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average daily balance method
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a method of computing finance charges that uses a weighted average of the account balance throughout the current billing period
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rule of 78s
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a mathematical formula to determine how much interest has been paid at any point in a loan term
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credit insurance
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any type of insurance that ensures repayment of a loan in the even the borrower is unable to repay it
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fair debt collection practices act (FDCPA)
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a federal law, enacted in 1978, that regulates debt collection activities
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consumer credit counseling service (CCCS)
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a lcal, nonprofit organization that provides debt counseling services for families and individuals with serious financial problems
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chapter 7 bankruptcy
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one type of personal (or straight) bankruptcy in which many debts are forgiven
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chapter 13 bankruptcy
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a voluntary plan that a debtor with regular income develops and proposes to a bankrupty court
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