Glossary
Debt Spiral
An economic situation in which an individual, household, business, or even a country accumulates new debt to repay old obligations, leading to an increasing amount of debt and greater financial instability. Loans are used to service previous debts (principal and/or interest), with interest costs rising over time and repayment capacity decreasing. This increases credit risk, worsens access to financing, and may eventually lead to insolvency (bankruptcy).
Debt-to-Income Ratio (DTI)
A term denoting the debt-to-income ratio (DTI), which indicates the percentage of a consumer's monthly gross income allocated to debt repayment. The DTI ratio is used by banks and financial institutions to assess the creditworthiness of individuals and households when granting loans. It reflects the portion of a person’s monthly income devoted to servicing existing debt, including principal and interest on loans, lease payments, and other financial obligations. A higher DTI indicates greater risk for the lender, while a lower DTI reflects stronger financial stability of the borrower.
Debt-to-Income Ratio (DTI)
A financial indicator showing what portion of a person’s income is used to repay loan obligations. Banks always calculate it when assessing a loan application.
Decedent
A deceased natural person whose estate passes to their heirs either according to the provisions of the Inheritance Act (intestate decedent) or according to their formally expressed will (testator).
Deductible (Co-Payment)
In insurance, it is the insured’s percentage or fixed contribution to the total amount of a claim, with the remaining amount covered by the insurer. The size of the deductible affects the insurance premium. In some contexts, especially in European insurance, it is also called a franchise or excess.
Deposit
Funds deposited by individuals or legal entities in accounts with credit institutions, guaranteed by law up to a certain limit.
Deposit
A type of bank savings product, a term deposit, which allows its holder to accumulate funds in a deposit account while earning income from providing the money to the bank.
Derivative Product (Derivative)
A financial instrument whose value depends on or is linked to the price of another asset called the underlying asset. Underlying assets can be stocks, bonds, indices, currencies, commodities, or other financial instruments. Derivatives are commonly used for risk hedging, speculation, or access to markets and assets otherwise difficult to reach. Common derivative products include forwards, futures, options, and swaps. Trading derivatives is usually associated with higher risk, which is why it is regulated and requires professional management.
Digital Wallet (Electronic Wallet)
A virtual platform or application for managing financial assets, storing information about payment cards, transactions, passwords, and more. The most common are mobile wallets designed for smartphones and other mobile devices.
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