Answer:
1. A thing of value a person loses if they default on a loan. a. collateral
2. A person who borrows money. f. borrower
3. The cost of borrowing money. b. interest
4. The original amount of money someone borrows. e. principal
5. The ability to borrow money in order to repay it in the future. c. credit
6. A term for an institution that loans money. d. lender
Explanation:
The term credit refers to the capacity to obtain money today to repay it later, usually in exchange for a specified amount of interest.
Collateral is an asset, such as real estate, that the lender receives as protection for providing a loan, in case the borrower defaults on payments. Credits that are bound by collateral often have considerably lower interest rates than unsecured ones.
