Breaking through the Consumer Finance Jargon
If you are looking for any type of loan, there will be various pieces of jargon you will come across. Before you start looking for installment loan direct lenders online, therefore, the following ABC of jargon by be useful for you.
Acceptance rate – the percentage of people that are accepted upon application.
APR (annual percentage rate) – how much interest you pay on your loan per year.
Arrears – any missed payments.
Base rate – the interest rate as it is set nationwide. This does not mean you will actually pay this rate.
Car loan – a loan that is designed for buying cars.
Credit file – the information available about you and your past financial behavior.
Credit bureau – the agencies that maintain your credit file (Equifax, Experian, TransUnion).
Credit search – the search that the lender will perform to see what your credit score is.
Credit score – the number assigned to you on your credit file that shows your credit worthiness.
Default – when you miss various payments.
Early redemption charge – a payment you have to make if you want to pay your loan off early.
Fixed rate – this means that the interest rate on your loan will never change.
Homeowner loan – this is a loan that is secured on your property meaning that your home will be repossessed if you don’t pay it back.
Installment loan – a loan whereby you make multiple payments over a predetermined period of time.
Lender – the agency that borrows you money.
Loan purpose – what you can spend the money you borrowed on.
Loan term – how long you will have the loan before it is paid off.
Monthly repayments – how much you pay on your installment loans, including interest.
Online loans – loans that are offered fully online. They can be processed quicker than traditional loans, meaning you will be able to access your money quicker as well.
Payday loans – a short term loan that is secured against your paycheck. These have very high APRs.
Personal loan – a loan that you can use for any purpose. Your credit score is very important with personal loans.
Qualifying criteria – the criteria you must meet in order to be eligible for a loan.
Repayment schedule – details about the amounts you will pay each month and how long for.
Secured loan – a loan that is secured against a certain piece of property such as your home, vehicle or other personal possessions.
Total amount repayable – the full amount of your loan plus interest charges.
Typical APR – the APR rate that the average person will pay on a loan.
Unsecured loan – a loan that is provided to you without any collateral. These tend to only be available for those people with excellent credit. Additionally, the loan amounts tend to be quite low.
Variable rate – if your interest rate can change over time. It is usually linked to the base rate that is set nationwide.