Repayments & Amortisation, Credit score
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8 Terms
What does it mean to amortise a loan?
To repay the loan gradually through regular payments.
What makes up a loan repayment?
Principal + Interest = Total repayment.
How does loan length affect repayments?
Shorter loan → higher monthly payments; Longer loan → lower monthly payments.
Why can shorter loans be better overall?
Lower interest rates; Less interest paid over the life of the loan.
What is a credit score?
A number that shows how reliable you are at repaying debt.
What is the biggest factor in your credit score?
Payment history (35%).
Why is credit utilisation important?
Using too much of your available credit lowers your score.
How do credit cards affect your credit score?
Paying on time improves it; missing payments damages it.
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