HEVT - Higher Education & Vocational Training Overview

Higher Education & Vocational Training

Introduction

Don’t have enough money to buy something? Don’t you worry – you can put it on a credit card or take out a loan and worry about it later.

Sounds harmless enough, but that purchase could end up costing you a LOT more money if you don’t pay off your balance right away. In fact, you could end up paying more in fees and interest alone than the orginal purchase!

Establishing credit is necessary to exist in today's society, but what is the correct way to do it? Find out in this module how you can build and establish important credit without it costing you way more than it should! 

Lesson Preview

In this module, we will study the following topics:

Simple Interest Loans: Discover single-payment loans and how to determine the amount of interest that will be charged. 

Amortization: Explore the different types of loans and how things such as the interest rate, the amount borrowed, and the term of the loan can make a big difference!

Monthly Payments: Take a look at the math behind how your monthly payments are calculated. Don’t just take your lender's word, do the math yourself!

Key Terms

The following key terms will help you understand the content in this module.

  • Annual Percentage Rate (APR) – The annual rate that is charged for borrowing money; expressed as a single percentage number that represents the actual yearly cost of funds over the term of the loan.
  • Average Daily Balance Method - Computes your finance charge by taking the balance from everyday during the billing period, adding them together, and then dividing by the number of days in the billing period.
  • Credit - A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date.
  • Credit Card - A card issued to users as a system of payment; it allows the holder to buy goods and services based on the holder's promise to pay for these goods and services.
  • Finance Charge - Any fee representing the cost of credit, or the cost of borrowing.
  • Installment Credit/ Loan – A loan that is repaid over time with a set number of scheduled payments; the term of the loan may be as little as a few months and as long as 30 years.
  • Loan – Type of debt; entails the redistribution of financial assets over time between the lender and borrower.
  • Maturity Value – The length of time from when a fixed-term debt security is issued until it must be paid off.
  • Periodic Rate – The monthly finance charge rate.
  • Previous Balance Method - Computes your finance charge based on the unpaid previous balance.
  • Simple Interest Installment Loans – With this loan, you must pay a finance charge for the use of the money.
  • Single Payment Loans – Repaid with a single payment after a specified period of time.
  • Term – Length of time for which the loan is granted.

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