Payday Loan (cash advance): A loan taken out based on an expected paycheck that will cover the loan amount and the fees acquired with it.
Paycheck: A weekly, bi-weekly, or monthly salary that a borrower obtains from their employers.
Bad Credit: A poor credit rating. This may have been caused by making late payments, skipping payments, exceeding credit card limits or declaring bankruptcy. Usually results in being denied credit.
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.
Balance Transfer: Moving a balance from one credit card to another. The usual reason is to shift an ongoing debt to an account with a lower interest rate.
Bankruptcy: To declare, legally, the inability to repay debts. A last resort, as it will have a severe impact on a credit rating and will remain on a credit report for ten years. Not a solution in all cases; federal student loans, federal tax debt and child support are all exempt from bankruptcy protection.
Borrower (applicant): The person or group applying for a loan.
Cash advance loan (payday loan): A loan where a borrower gets cash advanced based on his paycheck. These loans generally up are up $1500 and must be repaid on the next payday.
Checking Account: The borrower's account with a banking institution. Lenders normally require direct deposit on this account to be able to wire the cash directly into the account.
Credit: To buy or borrow in the present with the promise to pay back in the future. To postpone a payment of debt.
Credit Check: To review information on the borrower's capability to abide to their financial responsibilities. Not required by most payday loan lenders.
Credit Score: A record of an individual’s past and present liabilities and documentation of the regularity of payments made on these liabilities. A three digit number, typically between 300 and 850, that determines the borrower’s credit history and their ability to repay debts in a timely manner.
APR (annual percentage rate, interest rate): The rate charged each year to a consumer borrowing a finance company's money. This is usually expressed as a percentage — ex. An interest rate of 5% will cost you $50 for every $1000 borrowed.
Creditworthiness: The measure of a consumer's past and future ability to repay debts.
Credit History: A record that shows how a person has borrowed and repaid debts.
Default: A borrower’s failure to meet their financial obligations.
Depreciation: The value an asset loses due to wear and tear or time.
Direct Deposit: Refers to the process of transferring funds into your account electronically.
Fee: A fee charged against the amount borrowed; the higher the amount the higher the fee.
Interest: The amount charged by the finance company to borrow money.
Lender: A company, agent, organization or individual that advances the funds to make a loan to a borrower or debtor.
Liabilities: Money owed by the borrower.
Statement: The monthly bill from an issuer that describes and summarizes the activity on an account — includes the outstanding balance, purchases, payments, credits, finance charges and other transactions for the month.