| Term |
Definition |
| Personal Loan |
An unsecured loan, which
means a borrower does not put up any collateral or security to
guarantee the repayment of the loan. For this reason, personal loans
carry high interest rates. If a borrower owns a home, a
lower-interest-rate alternative is a home-equity loan. But this
option requires that the borrower put up his or her home or other
real estate property as collateral. Your best loan option is the
loan that best meets your needs. |
| Point-of-Sale (POS) |
A method by which consumers
can pay for purchases by having their deposit accounts debited
electronically without the use of checks. |
| Power of Attorney |
A legal document
authorizing one person to act on behalf of another. |
| Prepayment Premium |
Money charged for an early
repayment of debt. Prepayment premiums are allowed in some form (but
not necessarily imposed) in 36 states and the District of Columbia.
|
| Prime Rate |
The interest rate charged
by lenders to their best, most creditworthy customers. A less credit
worthy customer may be offered a loan at the prime rate plus
anywhere from 2 to 10 percent. Borrowing at below-prime also occurs,
but is less common and usually applies to businesses, not individual
consumers. The Federal Reserve determines whether to lower or raise
the prime rate based on a variety of economic factors. Many consumer
loans, such as auto, home equity, mortgage and credit card loans are
based upon the prime rate. Building and maintaining a good credit
history are two of the most important qualifications for prime-rate
borrowing. |
| Principal |
The amount of debt, not
counting interest, left on a loan.
|
