Glossary

  • Approved: For you to obtain a loan, you must be approved according to the payday loans terms used by the lender.
  • Apply: Includes the whole process of issuing a request to the lender in form of a bank statement, social security number, account number, etc.
  • Accrue: Is the accumulated interest once you get a loan.
  • Annual Percentage Rate (APR): Credit cost which is rated on yearly basis. The yearly rate provides a single value for the consumer with the intent of comparing the credit cost between different lenders.
  • Application: This is the first step for any borrower wishing to get a loan, whereby he/she gives out the necessary information concerning him/her together with the appropriate documentation.
  • Asset: Any property owned by an individual.
  • Assumption: A mutual understanding between the buyer and seller, whereby the buyer takes charge over payments on an existing mortgage from a seller. A loan is usually assumed to save the buyer since it’s an existing mortgage debt.
  • Auto Title Loan: A short term loan requiring collateral for example your car. Common terms for Auto Title Loan include Title Loans, Car Title Loans, and Automobile Title Loans.
  • Average Daily Balance: This is a procedure used to calculate finance charges. The calculation is therefore done by adding the outstanding balance on daily basis in the billing period then dividing the total accumulated amount by the number of days of that billing period.
  • Bad Credit: A term used to underscore poor credit rating. Events that damage a credit rating include late payments, avoiding payments, exceeding card limits or bankruptcy status. “Bad credit” in general can lead to credit access being denied.
  • Bankruptcy: A legal term used to describe individuals who are unable to repay their debts which should be seen as the last resort. Bankruptcy normally has severe impact on a credit rating and usually remains for ten years on a stated credit report. Bankruptcy is not a solution to many cases and things like Federal student loans, Federal tax debt and child support are not protected from any form of bankruptcy. Bankruptcy agreements vary but two of the stated agreements are considered popular by the public: Chapter 7 and Chapter 13.
  • Bank Statement: Bank Statement is issued by the bank showing all the activities of one’s checking account.
  • Balance: The total amount of money you owe others. This includes unpaid balance from a previous month, new purchases of goods, any cash advance and charges such as annual fee, delayed fee or interest. The balance is different from the monthly payments, so never confuse the two entities (minimum payments accepted on monthly basis) which are approximately between 2% to 5% for credit cards.
  • Balance Transfer: Transferring a balance (debt) from credit card to credit card. Usually done with specialized checks or forms, or may be an option on some of the available credit card applications. The purpose is to shift a current debt to an account with less interest rate.
  • Borrower: Also called an applicant, the borrower is client intending to borrow a loan or a potential customer.
  • Borrower’s Integrity: A rating that remains undisclosed about the applicant which is usually ruined when the applicant applies to various lenders simultaneously or has bad reputation with other payday loan lenders.
  • Contract: A written agreement outlining the terms between two or more individuals. (The paperwork documentation should be kept for latter retrieval if any questions arise during the specified period).
  • Capitalization: It’s the addition of capital loan plus the unpaid accrued interest by which the loan amount and cost of loan increases.
  • Cash Advance: Similar to payday loan, it’s a provision for borrowed cash by the applicant before his/her paycheck is due to be issued. Cash Advance is also referred to as Payday Advances, Payday Loans, Payday Advance Loans and Fast cash loans.
  • Cash Flow: This is the difference between your earnings and expense.
  • Credit Rating: Credit rating is the measure of credit suitability of an individual, corporation, or a country. It is the measure of a borrower’s credit history through the numerous bureaus. Normally calculated from any financial history, and currents assess and liabilities of the mentioned parties.
  • Credit Limit: The maximum amount of credit issued to a borrower.
  • CFSA: Community Financial Services Association of America or CFSA is an industry formed by the payday individuals meant to control and monitor aspects touching on ethics, standards and practices pertaining to lending of products.
  • Checking Account: Applicant’s account held by a banking institution. Lenders require direct deposit strategy on their account to enable them wire funds directly via their account.
  • Collateral: Security declared by a borrower to safeguard the well being of the lender; in case something happens, the lender may take ownership of the stated security that was initially declared by the borrower.
  • Credit: What you owe at present, needs to be repaid tomorrow.
  • Credit Agencies: Firms concerned with the collection of consumer’s credit information and then supplying it to the potential lenders as a report.
  • Credit Bureau: A private company acting as a storage facility regarding an individual’s credit history and does distribution upon request by the authorized parties. Once you apply for a credit with a lender, he/she may request a credit report to review whilst considering your application.
  • Credit Check: The review of an applicant’s information to determine ones capability in abiding to the stated financial terms. Many of the payday loan lenders don’t need this.
  • Credit History: A record showing payment history regarding ones previous debts.
  • Credit Report: A report normally kept by the bureau outlining ones credit history. It therefore has an individual’s name, address, social security number, payment history (good and bad), current and previous debts, employers, income, etc. Legally accurate information on the credit report may not be removed whereas incorrect information may be, if disputed over at the credit bureau.
  • Credit Worthiness: Debtors capability of paying debts in the future.
  • Debts: The amount you owe others. Direct Deposit: A term used to describe the process of transferring money (making deposits) electronically to your account.
  • Debit Card: It’s a checking or savings account card that offers direct access to any card holder. It’s similar to a check with money withdrawal made from the existing account balance.
  • Default: Failure to pay a debt as per the agreement. When this happens to a loan, the lender may demand full payment of the remaining amount of debt.
  • Equal Credit Opportunity Act (ECOA): A federal requirement to all lenders is to promote availability of credit to any credit worthy individual without considering aspects such as race, color, religion, national origin, sex, marital status, or age (the applicant should be capable to contract); to whether part or whole of the applicant’s income is derived from a public assistance program; or to whether the applicant has any right as stated by the Consumer Credit Protection Act. The guidelines prohibit creditors’ practices that discriminate on the above stated factors.
  • Fax (Facsimile): An electronic device that enables a user to transmit a document via specialized lines.
  • Fees: Payday loan charges normally charged if one borrows a specified amount. The higher the amount borrowed, the higher the charges and vice versa. This charge is however low compared to the APR charges done by credit card companies.
  • Finance Charge: The amount in dollar the credit will cost an individual. These charges include interest and also transaction and service fees.
  • Foreclosure: Legal process whereby the lender may sell real property in the event of a default. The sales profits go to the mortgage debt and ownership right is terminated.
  • Interest: Any additional amount declared on the principal.
  • Interest Rate: The additional amount paid by the borrower once a loan is issued. It is expressed in percentage.
  • Income: Money received partly or wholly from the following wages, dividends, interest, sales or rental or property or service, business or profits from a farm, welfare programs and allowances such as taxable and non-taxable social privileges and child support.
  • Lender: Firms or individuals that lend money to the consumers and therefore the consumers have to part with the so called “Interest”.
  • Liability/Liabilities: It’s the amount you owe other.
  • Loan: The amount of money acquired from an individual or an Organization and is usually repaid with a stated interest.
  • Loan applicant: Anyone who seeks a lender for some loan.
  • Monthly Payment: Payments made to the lender consisting of principal and the stated interest on monthly basis.
  • Net Worth: Is known once you subtract liabilities from the assets.
  • Payday Loan: It’s more of a cash advance. This is a loan taken out based on the assumption that the expected paycheck will definitely cover the amount of loan and its related fee.
  • Paycheck: It’s the applicant’s income based on weekly, bi-weekly, or monthly basis from their respective employers.
  • Payment: Installments made on monthly basis to the lender to repay a loan that was earlier issued.
  • Principal: It’s the interest calculated on money owed on a debt.
  • Repayment: The process of paying the lenders and creditors loan.
  • Refinancing: Is the procedure of obtaining fresh loans at lower rate of interest then repaying partly or wholly the loan capital of a firm.
  • Rollover: Instances where a payday cannot be repaid as per the stated plans the lender may extend this repayment period until the next paycheck. It therefore comes with additional per hundred fees; this rollover plan is a great contingency measure. There’s limitation of rollovers in most states.
  • Security interest: The creditor’s right to acquire part or wholly the property you gave as security for the loan that was issued.
  • Term: The stated time through which the borrowed loan must be repaid.
  • Wire Transfer: Electronic transfer of money from one account to the other. It’s the quickest way of moving money into an account.
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