Financial Literacy Key Terms

Loan

Money, property or other material goods given to another party in exchange for future repayment of the loan value or principal amount, along with interest or fnance charges. Examples: Mortgage, car loan, home renovation, starting a business

Debt

An amount of money borrowed by one party from another. Debt is used by many corporations and individuals as a method of making large purchases that they could not aford under normal circumstances.

Mortgage

A type of loan you can use to buy or refnance a home. Mortgages are also referred to as “mortgage loans.” Mortgages are a way to buy a home without having all the cash upfront. When you get a mortgage, your lender gives you a set amount of money to buy the home. You agree to pay back your loan – with interest – over a period of several years. You don’t fully own the home until the mortgage is fully paid of.

It’s important to note that the period of years you have to pay back your mortgage will afect your monthly payment and how much interest you will pay in total. For example, a 15-year mortgage will have a higher monthly payment than a 30-year mortgage, but with a 15year mortgage you will pay less interest since you are paying of your loan in a shorter amount of time.

DO YOU HAVE A STUDENT STORY YOU WANT TO TELL? Tell us about the impact Rock The Street, Wall Street has had on you and you could be featured on our website and social media!

Email your story with your name, school and grade along with a picture of yourself to: programs2@rockthestreetwallstreet.com