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Approved:  A payday or cash advance loan approval indicates that you have met the requirements needed to receive a loan.

Apply:  When you provide the information required by the lender for approval, you are applying for a loan. This may include but is not limited to, your social security number for identity protection, your checking or savings account number for direct deposit into your account, your monthly or weekly income, your place of residence, your place of employment, your telephone number, etc.

Accrue:  The accumulation of interest charges based on the loan amount that you have received over time.

Adjustable rate: an interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.

Amortize: To pay off in regular installments over a loan term.

APR (annual percentage rate), Interest Rate: The yearly rate charged to a consumer to borrow the finance company’s money. APR is usually expressed as a percentage. If your interest rate is 7.5%, you will pay $75 per $1000 borrowed.

Application:  The first step in providing the necessary information about you along with documentation (if required).

Appreciation: The value that an asset gains over a period of time, as opposed to depreciation.

Asset:  Something of value that can be used as collateral for a loan. Some lenders require that you list something that you own that is of value, in equivalent nature to the amount borrowed. Although infrequently required, this reduces the risk to the lender.

Assumption:  The agreement between the buyer of the loan and the seller (usually the original lender) whereas the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt.

Auto Title Loan:  A short term loan where you use your car as collateral.  Auto Title Loans are also commonly referred to as Title Loans, Car
Title Loans, and Automobile Title Loans.

Average Daily Balance:  The average daily balance is a method used to calculate finance charges.  It is calculated by adding the outstanding balance on each day in the billing period, and dividing that total by the number of days in the billing period. The calculation includes new purchases and payments.

Bad Credit: A term used to describe a poor credit rating.  Common practices that can damage a credit rating include making late payments, skipping payments, exceeding card limits or declaring bankruptcy. “Bad Credit” can result in being denied credit.

Bankruptcy:  Bankruptcy is a legal declaration of the inability to repay debts, typical a Chapter 7 or Chapter 13.  Bankruptcy is not the best option, although necessary for many people that are overwhelmed by their debts.  It will have an impact on a credit rating and will remain on a credit report for ten years. Furthermore, bankruptcy is not a solution in all cases.  Federal student loans, Federal tax debt and child support are all exempt from bankruptcy protection.  Bankruptcy agreements vary but there are two types of agreements that most people choose: Chapter 7 and Chapter 13.

Bank Statement: This is a document outlining the activity of your checking account normally issued by your bank.

Balance:  The total amount of money owed.  It includes any unpaid balance from the previous month, new purchases, cash advances, and any charges such as an annual fee, late fee or interest.  The balance should not be confused with the monthly payment (the minimum payment allowed each month), which is generally 2% – 5% for revolving credit cards.

Balance Transfer:  Moving a balance (debt) from one credit card to another.  This is often done with special checks or forms, or may be offered as an option on some credit card applications.  The usual reason is to shift an ongoing debt to an account with a lower interest rate.

Basis Point: One hundredth of one percent in the yield of an investment.

Blank Check®: A check that is given to loan recipients to purchase a new or used vehicle. The check is blank, which gives the loan recipient flexibility and convenience when shopping for a vehicle. The check is valid up to an agreed upon amount and there’s no obligation to use the check.

Borrower:  Commonly referred to as applicant, the borrower is the potential client or customer intending to obtain the loan.

Borrower’s Integrity:  This is an undisclosed rating of the applicant, normally ruined when the applicant applies to too many lenders at the same time or has a bad reputation with another payday loan lender.

Cap: the maximum allowable increase used for either payment or interest rate, for a specified amount of time on an adjustable rate mortgage. See Adjustable Rate Mortgages for a complete guide.

Capitalization:  Addition of unpaid accrued interest with your capital loan amount by which both Loan amount as well as cost to loan increases.

Cash Advance:  Same as a payday loan, this is a provision of cash borrowed against the applicant’s forthcoming paycheck.  Cash advances are also commonly referred to as Payday Loans, Payday Advances, Payday Advance Loans and Fast Cash Loans.

Ceiling: maximum allowable interest on an adjustable rate mortgage over the life of the loan.

Checking Account:  The applicant’s account with a banking institution. Lenders normally require the direct deposit feature on this account to be able to wire the funds directly into the account.

Closing: the time and place at which all documents for your loan are signed, dated and notarized.

Closing costs: any fees paid by the borrowers or sellers during the closing of the mortgage loan.

Collateral: Assets that a borrower is obliged to turn over to a lender if unable to repay a loan. Usually, the property itself is the collateral for a property loan.

Credit:  What you owe today, you have to repay it tomorrow.

Credit Agencies:  Organizations that collect consumer’s credit information and supply it to potential lenders in the form of a report.

Credit Check:  This is the process of reviewing information on the applicant’s capability to abide to their financial responsibilities. Most payday loan lenders do not require this.

Credit limit: the maximum amount that you can borrow.

Credit Repository: An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

Credit Worthiness:  Credit worthiness is a debtor’s ability to pay-off his debts in future.

Debts:  The amount owed by you to others. Direct Deposit: A common term used to refer to the process of transferring funds (making a deposit) into your account electronically.

Default: Failure to meet a financial obligation. Depreciation: The value an asset loses due to wear and tear or time.

Delinquency: failure to make mortgage payments when mortgage payments are due.

Equity: The value of the property minus the loan amount.

Fair Reporting Act: a consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one’s credit record.

Fax (Facsimile):  This is an electronic device that allows a user to issue a recipient a copy of a document as it appears via a specialized phone line.

Fees:  Payday loan lenders normally charge a fee against the amount borrowed — the higher the amount the higher the fee.  It’s considerably low compared to APR charges from credit card companies.

Fixed Rate: an interest rate fixed for the term of the loan. Payments as well are fixed at one amount.

Gross Income: the income of the borrower before taxes or expenses which are deducted and used for qualifying purposes. This may or may not include child support and alimony payments that are received by court order.

Household income: the total income of all members of a household. An important yardstick used by lenders evaluating applications for joint credit.

Interest:  Additional amount charged on the principal.

Interest Only Loan: an advance of money in which the installments pay only the interest that accumulates on the loan balance. The loan balance does not decrease with the payments. Usually the interest-only payments last for a limited period, after which payments rise and the borrower begins paying principal in addition to interest.

Interest Rate:  Additional amount paid by the borrower for any loan. Usually it is expressed as a percentage.

Late Charge: A fee imposed on a borrower for not paying on time.

Lender:  Individual or organization that provides money as a loan to the consumer against a certain charge called “Interest”.

Liabilities: The money you owe. Lien: A legal claim on a piece of property until the debt or obligation is satisfied.

Liened Property: A liened property is a property that has an outstanding loan obligation. The Certificate of Title for the property lists the individual(s) as the registered owner with the lender listed as the lien holder.

Lien-Free: A lien-free property is owned outright by an individual(s), listing that individual(s) on the title as the registered owner. There is no outstanding loan obligation on a lien-free property.

Line of credit: A commitment by a financial institution to lend up to a specified maximum amount to a customer during a specified period of time.

Loan:  The amount which is borrowed from an individual or an organization. The money usually is repaid with an interest.

Loan applicant:  Any person who approaches to a lender for a loan is a loan applicant.

Loan application: A document in which a prospective borrower details his or her financial situation to qualify for a loan.

Loan-to-Value Ratio: The relationship between the amount of the loan and the appraised value of the property, expressed as a percentage.

Monthly Payment: The principal and interest paid on a monthly basis over the life of the loan.

Monthly Payment:  The amount consisting of principal and interest paid to the lender on a monthly basis.

Negative Equity: When the amount you owe on a property is larger than what the property is worth.

Net Worth: Your assets minus your liabilities.

Origination Fee: The fee a lender charges to process a loan. It usually includes the cost to prepare loan documents, check a borrower’s credit history, inspect the property and sometimes conduct an appraisal.

Payday Loan: a loan made as a payday loan generally until ones next payday.

Paycheck: The applicant’s weekly, bi-weekly, or monthly income that they obtain from their employers.

Payment:  Monthly installments paid by the borrower to the lender in order to repay the loan.

Principal: The amount borrowed.

Rate: The annual rate of interest on a loan, expressed as a percentage of 100.

Repayment:  Procedure of paying-off Lenders/Creditors loan.

Simple Interest: A method of allocating monthly payday loan payments between interest and principal. The amount of your payment allocated to interest is calculated based on your unpaid principal balance, the interest rate on your cash advance loan, and the number of days since your last payment.

Term:  The agreed time within which the borrowed loan amount is to be repaid.

Truth in Lending Act: A federal law requiring a disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.

Unsecured Loan: An advance of money that is not secured by collateral.

Verification of Employment: Confirmation that a loan applicant is telling the truth about where he or she works and how much he or she makes.

Wire Transfer:  The electronic process by which money or funds are moved from one account to another electronically.  This is a very quick way of channeling money into an account.