Learning Bank - Glossary
Here are a list of financial terms and definitions to help you understand banks, credit, and loans.
- ATM - Stands for "automated teller machine." A machine the enables bank customers to perform basic transactions, such as deposits and withdrawals, anytime and often anywhere.
- Collateral - Assets, or property, pledged to secure the repayment of a loan.
- Credit Limit - A credit limit is the highest amount you may borrow on your credit card. This limit is set by the credit card company.
- Credit Report - A credit report is a full history of information within a consumer's credit file at the credit reporting agencies.
- Equity - The value of property greater than total debt held on it.
- Fee - The amounts charged by financial institutions for activities like reviewing your loan application and servicing the account.
- Interest Rate - The amount of money a financial institution charges for letting you use its money. A bank may also pay you interest if you lend your money to the bank by placing it in certain types of accounts.
- Loan Agreement - A written contract between a lender and a borrower that sets out the rights and obligations of each party regarding a loan.
- Minimum Balance - The minimum amount of money a bank may require to be in your account at all times. Sometimes, if the amount of money in your account is less than the minimum balance required you may be charged a fee.
- Minimum Payment - A minimum payment is the amount you are required to pay each month on a debt.
- Promissory Note - A written contract between a borrower and a lender that is essentially the borrower's promise to pay the lender.
- Term - Refers to the maturity or length of time until final repayment on a loan, bond, sale or other contractual obligation.