Terms for Module 10/11/12 Quiz

Registered Education Savings Plan (RESP)

A plan designed to help families save for their child’s post-secondary education.

Canada Education Savings Grant

A government program that encourages Canadians to save for their child's post-secondary education.

Canada Learning Bond

A government program that provides financial support for post-secondary education by depositing money into a RESP.

Depreciation

A reduction in the value of an asset over time.

Appraisal

Assessing something or someone.

Leasing

A financial arrangement in which someone pays to use land, a vehicle, etc. for a particular period of time.

Monthly payment

Payment made on a monthly basis.

Down-payment

Partial payment made at the time of purchase, with the remaining balance to be paid later.

Mortgage

An agreement between you and a lender that gives them the right to take your property if you don't repay the money borrowed plus interest.

Amortization period

The total length of time it takes to pay off a loan.

Terms of the mortgage

The conditions and period of time outlined in the mortgage contract.

Roaming fees

Fees when using your mobile phone outside your service provider's normal coverage area.

Debtor

Someone who borrows money from others.

Creditor

Someone who lends money to others.

Liability

Something that you owe.

Asset

Money that has been loaned to someone else to be paid back, like credit.

Net Worth

The value of all assets, minus the total of all liabilities.

Principal

The amount you borrow.

Dividend

A sum of money paid regularly by a company to its shareholders out of its profits.

Amortization

The action or process of gradually writing off the initial cost of an asset.

Interest

The cost you pay for using someone else’s money.

Capital

Refers to things you do that have value and could possibly be sold to pay back a loan.

Character

How responsible and reliable you are likely to be in repayment of the loan.

Capacity

Whether you have enough income to pay the loan.

Credit rating

Assessment of your creditworthiness.

Collateral

Something of value put up in support of a loan that can be sold if the loan can’t be repaid.

Co-signer

A person who signs a loan agreement and is willing to pay back the loan if the borrower can’t repay.

Consolidation loans

One loan taken out to pay off several debts, allowing for one monthly payment.

Credit limit

The maximum amount of money a lender will allow a borrower to spend on a credit card or line of credit.

Payday loan

Companies that people borrow money from, usually with high interest.

Credit check

A check on your credit rating to determine lending eligibility.

3Cs

Criteria used to assess creditworthiness: Capacity, Character, and Credit history.