A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Installment LoanA loan repaid in fixed, scheduled payments over a set term, such as an auto loan, student loan, or personal loan.
- Secured DebtBorrowing backed by collateral, like a house or car, that the lender can take if you fail to repay the loan.
- RepossessionWhen a lender takes back collateral, such as a car, after you default on a secured loan tied to that property.
- Loan TermThe length of time you have to repay a loan in full, which affects both your monthly payment and total interest paid.
- Fixed Interest RateA rate that stays the same for the life of a loan, so your payment amount does not change over time.
- CollateralAn asset you pledge to back a loan, giving the lender the right to seize it if you do not repay as agreed.
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Plain-English education — not personalized legal, tax, or investment advice.