EOPA ENTREPRENEURSHIP STUDY SET Actual QUESTIONS

EOPA ENTREPRENEURSHIP STUDY SET Actual / QUESTIONS and verified correct ANSWERS.Direct Plus Loans - ---Answers---A federal loan available to graduate or professional students and eligible parents of dependent undergraduate students to help pay for the cost of the student's education at participating schools

Installment Loan - ---Answers---Loan used to finance a specific purchase for a specific amount of time, during which regular payments pay the accrued interest and a portion of the principal

Term - ---Answers---The amount of time you have to repay your entire loan

Collateral - ---Answers---Something valuable that the lender can take as payment if you can't or don't repay your secured loan

Down Payment - ---Answers---A partial payment made in cash at the beginning of the purchase of a good or service, while the remaining balance is due later or is financed as part of a loan

Mortgage - ---Answers---A loan by individuals and businesses to make real estate purchases without paying the entire value of the purchase up front

Late Payment Fee - ---Answers---A fee charged if your payment is received after the due date

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Principal - ---Answers---Original amount of money borrowed, separate from interest or fees

High Rate Method - ---Answers---A method of debt repayment whereby the borrower prioritizes paying down debts with the highest interest rates first

Credit Report - ---Answers---A document containing an individual's financial information focusing on payment of their credit obligations over time

Credit Utilization Rate - ---Answers---A measurement of your outstanding debt divided by your total available credit

Default - ---Answers---Long-term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower's credit score

FICO Score - ---Answers---The most commonly used credit score

Credit Score - ---Answers---A three-digit number (ranging from 300- 850) based on an individual's credit history detailed in a credit report

Credit - ---Answers---An agreement in which a borrower receives something of value now and agrees to repay the lender in the future, generally with interest

Credit History - ---Answers---A record of a person's use of credit over time; your credit history plays an important role in determining your credit score

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Collections - ---Answers---Attempted recovery of a past-due credit obligation or debt by a collection department or agency

Net Worth - ---Answers---A measurement of your assets (money you've saved or things of value you own) minus your liabilities (money you owe others); also called wealth

Thin File - ---Answers---A term used to describe someone with little to no credit history

Credit Counselor - ---Answers---A certified financial advisor who works for an accredited nonprofit specializing in helping consumers repay debt in a responsible manner

Debt Snowball Method - ---Answers---A method of debt repayment whereby the borrower prioritizes paying down debts with the smallest balances first

Credit Bureau - ---Answers---A company that collects and sells information about how individual people manage their credit (e.g.Equifax)

Bankruptcy - ---Answers---A legal process that relieves debtors of the responsibility of paying their debts or protects them while they try to repay

Annual Percentage Rate (APR) - ---Answers---The interest rate a credit card user will be charged on the unpaid portion of their balance

Capitalized Interest - ---Answers---Unpaid interest that has been added to the principal balance of a federal student loan 3 / 4

Grace Period - ---Answers---A period of time that generally begins on the day after a borrower graduates, leaves school, or drops below half- time enrollment and ends on the day before the repayment period begins; borrower typically is not required to make payments during this time

Tuition - ---Answers---Sticker price for the academic portion of your college expenses, which does not include room and board, textbooks, or other fees

Direct Subsidized Loan - ---Answers---A student loan that the federal government pays interest on as long as the student is in school at least half-time

Principal - ---Answers---Original amount of money borrowed, separate from interest or fees

Pell Grant - ---Answers---A Federal program based on substantial financial need and which does not need to be repaid

Free Application For Federal Student Aid (FAFSA) - ---Answers---A form prepared annually by current or prospective college students to determine their eligibility for financial aid

Work Study - ---Answers---A program that provides funds to eligible students in exchange for part-time employment to help finance the costs of postsecondary education

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