Agreement - An agreement between two parties towards a common objective: get a payday loan from a pay day loan provider.
Asset - Includes property, goods, savings or investment that has cash value owned by someone.
Assumption - The agreement between buyer and seller where 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.
Annual Percentage Rate (APR) – is the effective interest rate that the borrower will pay on a payday loan, taking into account one-time fees and standardizing the way the rate is expressed. APR is the total cost of payday loan to the consumer, expressed as an annual percentage of the amount of credit granted.
Average Daily Balance - The average daily balance is a method used to calculate finance charges on a payday loan. It is calculated by adding the outstanding balance on each day in the billing period, and dividing that total by the number of days between two bills.
Bad Credit - A term used to describe a poor credit rating. Common practices that can damage a credit rating include making late payments on payday loan, skipping payments or declaring bankruptcy. Bad Credit can result in more expensive credit or inability of getting credit.
Balance - The total amount of payday loan owed. It includes any unpaid amount from the previous month, new purchases, cash advances, and any charges such as late fee or finance charge.
Bankruptcy - Bankruptcy is a legal declaration of the inability to repay debts including payday loan. Bankruptcy can have a severe impact on 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 are two types that most people choose: Chapter 7 and Chapter 13.
Buy-down - A lump sum payment made to the creditor by the borrower or by a third party to reduce the amount of some or all of the consumer's periodic payments to repay the indebtedness.
Cash advance loan - a loan also called a payday loan, where a borrower gets cash advance based on his paycheck. These loans generally are for low amount and must be repaid on the next payday.
Closed-end Credit - Generally, any loan or credit sale agreement in which the amounts advanced, plus any finance charges, are expected to be repaid in full over a pre-defined time. Most real estate and automobile loans are closed- end agreements. It does not define a payday loan
Collateral - Asset that is offered to secure a loan or other credit and that becomes subject to seizure on default.
Cosigner - Person other than the borrower who signs for a loan and assumes equal liability for it. Ususally not applicable to payday loan
Credit - The promise to pay back a payday loan in the future in order to borrow in the present.
Credit Bureau - is a company that provides consumer credit information on individual borrowers. This helps lenders assess credit worthiness, the ability to pay back a payday loan, and can affect the interest rate applied to loans.
Creditworthiness - A creditor's measure of a consumer's ability and willingness to repay payday loan and other debts.
Credit History - A record of how a person has borrowed and repaid debts.
Credit Scoring System - A statistical system used to determine whether or not to grant payday loan or other credit by assigning numerical scores to various characteristics related to creditworthiness.
Debt service - Total payments due on payday loan (repayments plus interest).
Default - Failure to meet the terms of a credit agreement.
Discharge - A legal terms meaning a court has erased your debts.
Disclosure – The terms of the payday loan given to the borrower in a written document.
Discount - An amount deducted from the regular price for those who purchase with cash instead of credit.
FICO Score - This is your credit score that creditors look at when determining if you are credit worthy. Your score is determined by negative entries such as late payments which would decrease your score or a positive, timely payment history on your accounts which would increase your score.
Finance Charge - The total dollar amount paid to get payday loan.
Fixed Rate - A traditional approach to determining the finance charge payable on an extension of credit where a predetermined rate of interest is applied to the principal.
Liability - Legal responsibility to repay debt.
Lien - a notice a creditor attaches to your property that tells the world that you owe the creditor money. You cannot sell the property without paying off the creditor because the lien makes the "title" (history of ownership) cloudy and a new owner won't buy under those conditions.
Negative Amortization - Repayment schedule calling for periodic payments that are insufficient to fully amortize the loan. Earned but unpaid interest is added to the principal, increasing the debt. Eventually, payments must be rescheduled to fully pay off the debt.
Open-end Credit - A line of credit that may be used repeatedly up to a certain limit, also called a charge account or revolving credit.
Overdraft Checking Account - A checking account associated with a line of credit that allows a person to write checks for more than the actual balance in the account, with a finance charge on the overdraft.
Payday Loan - a loan where a borrower gets cash advanced based on his paycheck. Payday loans generally are of low amount and must be repaid on the next payday.
Points - Finance charges paid by the borrower at the beginning of a loan in addition to monthly interest; each point equals one percent of the loan amount.
Principal - Amount of the payday loan.
Renegotiable Rate - A type of variable rate involving renewable short- term "balloon" note. The interest rate on the loan is generally fixed during the term of the note, but when the balloon comes due, the lender may refinance it at a higher rate. In order for the loan to be fully amortized, periodic refinancing may be necessary. Does not apply to payday loan.
Reschedule - Revised timetable for loan repayments, usually granting longer repayment periods and often involving new loans to pay old ones
Security Interest - The creditor's right to take property or a portion of property offered as security.
Service Charge - A component of some finance charges, such as the fee for triggering an overdraft checking account into use.
Statement - The monthly bill from a lender that describes and summarizes the activity on an account.
Statement Date - The date on which a statement is generated, and the month's finance charges (interest) are added to the balance.
Variable Rate - A variable rate agreement, as distinguished from a fixed rate agreement, calls for an interest rate that may fluctuate over the life of the loan. The rate is often tied to an index that reflects changes in market rates of interest. A fluctuation in the rate causes changes in either the payments or the length of the loan term. Limits are often placed on the degree to which the interest rate or the payments can vary.
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