Independent work credit

The Ministry of Higher and secondary special education the republic of Uzbekistan
ANDIJAN MACHINE BUILDING INSTITUTE
“Economy” chair
2 course 09-20
student Erkinov Saidmurod
INDEPENDENT
WORK
Credit

Overview: Credit 101

• Credit: someone is willing to loan you money - called principal - in exchange for your promise to pay it back
• Interest: amount you pay to use someone else’s money.

Annual Percentage Yield (APR): amount it costs you a year to use credit, expressed as an interest rate

• Annual Percentage Yield (APR): amount it costs you a year to use credit, expressed as an interest rate

In addition to the APR, there may be other costs of using credit

• Annual Fee: yearly charge for the privilege of using credit.
• Finance Charge: Actual dollar cost of using credit, which is calculated by a lender.
• Origination Fee: Charge for setting up the loan.
• Over-the-limit Fee: Spending more than your limit.
• Late Fee: Penalty for making a payment after the due date.
• Universal Default: Hike in interest rate because you made 1 late payment.

Need to Know

• Grace Period: the number of days in which no interest or finance charges will apply.
• Minimum Payment: The smallest amount you must pay on your credit card each month (usually 2%).
• Credit Limit: The maximum amount that you can charge on your credit card.
• Loan Term: The length of time you have to pay off the loan.

5 C’s of Credit

• Capacity –Can you repay the loan?
• Collateral – What if you don’t repay the loan?
• Capital – What are your assets and net worth?
• Credit History – What is your credit history?
• Character – Will you repay the loan?