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CAPITALIZED INTEREST is the accrued interest added to the principal balance of a loan while you are not making payments or your payments are insufficient to cover both the principal and interest due. When this occurs, you are paying interest on interest, sometimes called "negative amortization".

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SPOT-CASH is the immediate cash payment on a transaction.

JUNK BOND is a bond with a speculative credit rating of BB or lower. Such bonds offer investors higher yields than bonds of financially sound companies. Two agencies, Standard & Poors and Moodys Investor Services, provide the rating systems for companies credit. See HIGH YIELD JUNK.

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