Payday Loans Glossary
Approved - Being approved, in terms of payday loans, means that you have met the criteria issued by the lender in order to obtain the loan. Apply - The process of requesting funds from a payday loan lender. This usually involves providing the requested information to the lender. For example, your bank statement, social security number, account number, etc. Asset -Your assets are made up of anything you own that has a cash value, including property, goods, savings and investments. 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 - When you have bad credit, you have a poor credit rating, and you can be turned down when you apply for credit. This is caused by making late payments, skipping payments altogether, exceeding your credit card limits or declaring bankruptcy. Balance - The balance is the remaining amount owed. 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. Bankruptcy - When you declare bankruptcy, you’re legally stating that you’re unable to repay your debts. The debts are erased by the courts, but you may not be able to get new credit for many years. Bankruptcies are recorded on your credit report. Bank Statement - An official record outlining the activity of your account for a given period of time (usually a month), issued by your bank. Beacon Score - Your beacon score is recorded on your credit report, telling creditors if you’re creditworthy. It’s determined by the amount of activity on your report, including positive factors like timely payment of loans, and negative factors like late payments. Every time you apply for credit, it’s counted as a negative on your beacon score. Borrower - Also referred to as Applicant, this is the person applying for a loan. Borrower's Integrity - An undisclosed rating of the credit-worthiness of an applicant. Payday loan lenders use a number of factors for determining this rating, including (but not limited to) credit history and any outstanding or pending payday loans. Cash Advance - Same as a payday loan, this is a provision of cash borrowed against the applicant's forthcoming income. Cash Avance loan - A cash advance loan, or a payday loan, consists of money borrowed until the borrower’s next payday. Current Account - The applicant's account with a banking institution. Lenders normally require the direct deposit feature on this account to be able to transfer the funds directly into the account. Collateral - Property that is offered to secure a loan or other credit and that becomes subject to seizure on default. (Also called security.) Cosigner - Another person who signs for a loan and assumes equal liability for it. Credit - When you’re extended credit, you promise to pay in the future in order to borrow today, which in effect defers repayment of your debt. Credit Card - Any card that may be used repeatedly to borrow money or buy goods and services on credit. Creditworthiness - Creditworthiness is a creditor’s measure of your past and future ability, and your willingness, to repay your debts. This is often determined in part by your consumer credit report. Credit Check - The process of reviewing information on the applicant's capability to abide to their financial responsibilities. Many payday loan lenders do not require this. Credit History - Your credit history is a record of the debts you’ve borrowed and repaid in the past. Credit Scoring System - A statistical system used to determine whether or not to grant credit by assigning numerical scores to various characteristics related to creditworthiness. Default - Default occurs when you fail to meet the terms of your credit agreement. Direct Deposit - The common term used to refer to the process of transferring funds (making a deposit) into your account electronically. Fee - Payday loan lenders normally charge a fee against the amount borrowed; the higher the amount the higher the fee. Flexible Loan - A Flexible Loan is when you have flexibility in the amount of your monthly payment. You can overpay one month and underpay the next as your finances allows. Interest - The interest charged on a loan is added to the principal amount to give the total amount to be repaid by the borrower. It’s sometimes referred to as the cost of borrowing. Liability - Legal responsibility to repay everything you owe to others. Net Worth - Your net worth is calculated by subtracting your liabilities from your assets. No Credit Check Payday Loans - Payday Loans for people with bad credit that don't do a full credit check for every application. A simple credit vetting process such as looking up the files of a reference agency and other data sources such as bank records, payslips, credit card records may be used in the process. Open-end Credit - Credit that may be used repeatedly up to a certain limit. Open-end Lease - A lease that may involve a balloon payment based on the value of the property when it is returned. (Also called finance lease.) Overdraft Current Account - An overdraft current account gives you credit that lets you write checks for more than the actual balance in your account, with a charge for the overdraft. Payday Loan - Like a cash advance, this is a loan taken out based on an expected income that will cover the loan amount and the fees acquired with it. Payday Advance - same as a payday loan. Paycheck - The applicant's weekly, bi-weekly, or monthly income that they obtain from their employers. Principal - The principal of a loan is the actual amount borrowed. Rollover - When you rollover your payday loan, you extend or renew the loan by paying the fees for the next two weeks, or until your next payday. Every time you do this, you double your costs for the loan - we do not recommend rolling over your loan. Same Day Cash - the ability of the lender to wire the money same day*. Same Day Payday Loan - A payday loan that is deposited on the same day* you apply. Security interest - Security interest is the creditor’s right to take all or part of the property you offered as security for the loan. Service Charge - A component of some finance charges, such as the fee for triggering an overdraft current account into use. Statement - The monthly bill from a credit card issuer, bank or finance provider that describes and summarises the activity on an account. A statement includes the outstanding balance, purchases, payments, credits, finance charges and other transactions for the month. Statement Date - The date on which a statement is generated, and the month's finance charges (interest) are added to the balance. |
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