Glossary

BANKRUPTCY - Bankruptcy means that an individual is unable to discharge all your debts as they come due.

BUDGET - A budget is a form in which you spend and spread your money around to get some money to save, pay your debts and buy goods.

COLLATERAL VALUE - A collateral value is a value on which you can base a loan.  A bank can lend you a big amount of money on a long period of time for a house because if you fail to make the payments, they still have the house in their possession. 

CONSOLIDATION - A debt consolidation consists of taking out a single loan, most of the time at the bank, and pay off all other debts.  That means you will only have one payment instead of maybe five or six with different payment methods, dates, interest rates.

CREDIT - Credit is money available for a client to borrow representing future buying power in the present.  It gives you the opportunity to buy something more expensive that you can really buy today.   

CREDIT CARD - A credit card is the most accessible form of credit.  You can buy goods from almost every store with a credit card.  The interest rates are usually higher than regular loans.  The main difference also is that you build a balance from zero instead of spending money you borrowed.  This is the most practical and also most dangerous form of credit there is as it develops habits of being comfortable with credit. 

DEBT - A debt is an obligation to pay money or goods or services owed to someone or an entity

EQUITY LOAN - An equity loan is a mortgage value on real estate in exchange for money to the borrower.  When someone owns a house, it can withdraw the capital that is equal to the value of the house and have that capital in cash money. 

INVESTMENT - An investment is an action taken from an individual or an enterprise which consists in laying out money or capital expecting profit on the short and long term.   

LOAN - A loan is the action of giving temporarily; let have for limited time money in exchange for a surplus at the end of the term, which is represented by the interest rate. 

MORTGAGE - A mortgage is a conditional conveyance of property as a security for the repayment of a loan.  Example: a house mortgage.

REVOLVING CREDIT - Revolving credit or open-end credit allows a consumer a credit line that can be used up to a certain limit or paid down at any time.  Example: a credit card.