5 Loans and credits vocabulary

Terms related to borrowing money and extending credit.

loan – an amount of money borrowed and expected to be paid back with interest.

mortgage – a loan used to purchase property, secured by the property itself.

personal loan – an unsecured loan for personal use.

credit card – a card allowing the holder to purchase goods or services on credit.

line of credit – an arrangement allowing borrowing up to a certain limit.

repayment schedule – a plan detailing how a loan will be repaid.

collateral – an asset pledged as security for a loan.

non-performing asset (NPA) – loans or advances in default or arrears.

debt service coverage ratio (DSCR) – a measurement of the cash flow available to pay current debt obligations.