MoneyU Glossary of Terms


MoneyU Glossary of Terms


Browse the glossary using this index

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D

Daily Periodic Rate

The daily periodic rate is your annual interest rate expressed on a daily basis. It equals 1/365th of your annual percentage rate.

Death Certificate

A legal document produced by the states showing that a person has died. It is used to obtain proceeds from life insurance policies and to show the probate court that the probate process should begin.

Debit Card

This card allows you to deduct the amount of your purchase directly from your checking account for payment to the merchant.

Debt

A liability or obligation in the form of bonds, loan notes, or mortgages, owed to another person or persons and required to be paid by a specific date.

Debt Consolidation

The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. (Also called Consolidation Loan.)

Debt Manager

Someone that restructures your current debt with your existing creditors. You don't loan money from them (or anyone else) and you still owe all of the same creditors. However, the Debt Manager can help change the terms and conditions that apply to your current debt. The Debt Manager then consolidates your debts into one monthly payment. You pay the Debt Manager and the Debt Manager sends your payments to your creditors for you each month.

Debt Ratio/Debt Burden

An amount of money you owe to banks or credit issuers. It is the percentage of your income that goes to paying your debts every month. Debt ratio usually gives a clear picture of your overall financial well-being. To calculate your debt ratio, first add up all your monthly income including take-home pay (after taxes), Social Security or disability benefits and alimony. Then add up all your monthly payments for interest bearing loans and accounts, such as mortgages, student loans, credit cards and car loans. If you rent your home, include that amount, but do not include utilities and telephone charges because they can vary on a monthly basis. Finally, divide your monthly payments by your income. Multiply the result by 100 and that number is your debt ratio percentage.

A low ratio is under 20%, which means that you are in good financial health and are doing a good job of managing your money.

A moderate ratio is between 21% and 40%. This means that you should look carefully at your monthly payments and start decreasing your overall level of debt, including credit cards.

A high debt burden is over 40%. You should immediately stop accumulating debt and start looking for ways to decrease your debt or increase your income.

Debt Repayment Plan

A plan you create to most efficiently repay all of your debts.

Debt-to-Income Ratio

Your debt-to-income ratio compares the amount of your debt (excluding your mortgage or rent payment) to your income.

Decedent

A deceased person.

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