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
- Revolving CreditA type of borrowing where you can repeatedly use and repay up to a limit, like a credit card, without a fixed payoff date.
- AmortizationThe process of paying off a loan through scheduled payments that cover both interest and principal until the balance reaches zero.
- Loan TermThe length of time you have to repay a loan in full, which affects both your monthly payment and total interest paid.
- Auto LoanAn installment loan used to buy a vehicle, secured by the car, which the lender can repossess if you default.
- Personal LoanA lump-sum loan, usually unsecured, repaid in fixed installments and used for anything from debt consolidation to big purchases.
- PrincipalThe original amount of money you borrow, separate from the interest and fees that get added on top of it.
More in Credit & Debt
Plain-English education — not personalized legal, tax, or investment advice.