Specific Terms  Instant Payday Lenders

ACH - Automatic Clearing House (ACH) serves as a convenient method for transferring funds between bank accounts.

APR or Annual Percentage Rate - APR represents the yearly cost of credit, distinct from the contract interest rate.

Balance - The remaining funds in a bank account.

Bankruptcy - A legal process under America's Federal Court initiated by a borrower unable to repay debts, potentially leading to negotiated settlements or asset liquidation. Bankruptcy records may affect an individual's credit history for up to a decade.

Budget - A financial plan for managing expenses and saving money.

Caps - Limits set on the interest rate of an adjustable-rate mortgage loan.

Cash advance - Emergency funds accessible to employed individuals lacking alternative credit sources, intended to bridge financial gaps until the next payday. Interest accrues from the date of advance.

Charge off - A credit card debt or loan deemed uncollectible, often resulting in debt assignment to collection agencies while remaining potentially collectible.

Checking account - Funds held in a bank for easy access through check writing or ATM withdrawals.

Security or Collateral - Assets pledged to secure loan repayment.

Compound interest - Interest calculated on the loan balance, including unpaid interest.

Co-signer - An individual jointly signing a loan agreement, sharing responsibility for repayment.

Credit - Commitment to pay for current goods or services at a later date.

Credit request - A written application for credit, sometimes incurring a processing fee.

Credit bureau - Organizations compiling borrowers' credit histories, providing reports to lenders for decision-making. Major credit reporting agencies include Experian, TransUnion, and Equifax.

Credit card - Issued by banks for purchasing goods or services, subjecting outstanding balances to interest.

Credit counseling - Assistance provided by organizations to help consumers improve credit and financial management.

Credit limit - Maximum amount allowed to be charged on a credit card or line of credit.

Credit line - Also known as a personal line of credit, it represents the maximum amount available for borrowing against an account, which can be replenished upon repayment.

Credit report - Documentation detailing a person's debt repayment history, outstanding debts, bankruptcies, and late payments.

Creditor - Entity to which money is owed or from whom borrowing occurs.

Debit card - Issued by banks for making purchases, deducting funds directly from a checking account.

Debt - Amount owed to a lender.

Debt Consolidation - Strategy to streamline debt management by consolidating multiple bills into a single payment to a financial institution.

Default - Failure to fulfill loan repayment obligations or adhere to loan terms.

Delinquency - Failure to make timely payments.

Direct Deposit - Electronically transferring funds directly into a bank account, eliminating the need for a paper check.

Equal Credit Opportunity Act - Federal law prohibiting lender discrimination against loan applicants.

E-Signature - Electronic method of binding one's signature to a document, legalized by the E-Sign Act of 2000.

The Fair Credit Reporting Act - Federal law granting borrowers access to their credit reports and the ability to dispute inaccuracies.

FDIC or Federal Deposit Insurance Corporation - Federal agency insuring consumer deposits in banks for up to $100,000 per account, covering savings, checking, and deposit certificates.

Finance charge - Total credit costs expressed in a dollar amount.

A fixed interest rate - Interest rate remains constant throughout the loan term.

Foreclosure - Legal process allowing the sale of pledged collateral to repay a loan when the borrower defaults.

Installment loan - Loan with a set number of payments and a fixed loan amount.

Interest - Fee charged by lenders for borrowing money.

Interest rate - Rate at which lenders charge borrowers for loaned funds, expressed as a percentage per annum.

Judgment - Court decision determining the outcome of a lawsuit.

Late payment fee - Charge for payments not received on time.

Lease - Legal agreement allowing the use of an asset, such as a car, in exchange for payment, with the asset returned at the end of the lease term.

Lender - Entity providing loans or credit to individuals.

Liable - Legally responsible.

Lien - Creditor's claim to property as collateral for debt repayment.

Loan - Borrowed amount to be repaid with interest.

Loan Agreement - Legal contract detailing loan terms and conditions.

Mortgage loan - Loan used to purchase real estate, with the property serving as collateral.

Public Record - Information obtained from federal, state, or other sources detailing a person's financial obligations.

Refinance - Paying off an existing loan with proceeds from a new loan to secure a lower interest rate.

Repossess - Retrieving items pledged as collateral due to borrower failure to repay a loan.

Right of recession - Borrower's right to cancel a contract within three business days.

Savings account - Bank account for storing money, often earning interest.

Secured loan - Loan requiring collateral, such as a car or home, which may be seized if the borrower defaults.

Security - Collateral securing a loan.

Simple interest - Interest calculated solely on the outstanding principal amount.

Title - Document proving ownership of property.

Truth in Lending Act - Federal law mandating lenders disclose loan costs, terms, and conditions in clear terms to borrowers.

Unsecured loan - Loan granted based on a borrower's promise to repay, without collateral.

Variable interest rate - Interest rate fluctuating based on a current index, such as the prime rate.

Yield - Effective rate of return on investments such as money market accounts, bonds, or savings.