Glossary

APR – Annual Percentage Rate is the cost of credit expressed as a percentage of the principal in annual terms. It is a function of the total time period of the loan and includes all finance charges. There are many ways to calculate APR.

Maturity Date – A maturity date is the scheduled date when the final payment amount, i.e. the principal amount and outstanding interest of a loan, bond or any debt instrument becomes due and payable.

Checking Account – A checking account is a bank account from which the owner can withdraw cash from an ATM and for which the owner can write checks. Checking accounts typically carry very low rates of interest or none at all.

Savings Account – A savings account is a bank account or an account made in any depository financial institution where money is deposited with the purpose of earning interest, and yet money can be withdrawn at any time or at a specified time in some cases. A savings account will carry a higher rate of interest than a checking account and may be in the name of more than one person. The bank may require the owner to name a beneficiary at the time of establishing the account. Typically, check facility is not available for this type of account.

Usury – Usury originally meant the fee or interest charged for loaning money but has come to mean the charging of unfairly or illegally high rates of interest on loans.

Balance – Balance refers to the remaining amount of money in an account or the remaining amount of a loan left to be paid.

Lender – A financial institution, agent, organization or individual that advances the funds to make a loan to a borrower or debtor.

Loan – A loan is a debt liability that one party takes on from another party – it refers to the provision of money for a limited period of time to a party in need of the money (known as the debtor or borrower) from another party (the lender or creditor). Most loans are paid back in regular installments and carry a cost of borrowing.

Interest Rate – The cost of borrowing money for a limited period of time, i.e. the charge that a borrower pays for taking out a loan. It is usually expressed as a percentage of the principal amount of the loan and is typically paid over a period of time. The final interest amount is a function of the interest rate, the amount and time period of the loan.

Finance Charge – Finance charge is the total cost of taking out a loan expressed in dollar terms, including interest charges, service charges, processing fees and all other transaction related fees.

Personal Check – A personal check is a check drawn on a financial institution by an individual against their personal funds, such as a checking account.

No Fax Payday Loan – A payday loan is a short term loan of a small denomination that is meant to cover an individual’s needs between paychecks. Most payday loans require the borrower to fax certain employment and bank account credentials to the payday lender. However, a no fax payday loan or a faxless payday loan is available without the requirement of faxing these details. The no fax payday loan is usually available online or via the phone and is almost instantaneous.

Social Security – The old age, survivors and disability insurance section of the Federal Social Security Act provides for American citizens a supplemental income that can be used in case of retirement and disability. Social security is the term colloquially used for this income, and is calculated based on your reported compensation history.

Pension – A pension is a regular payment made to an individual that is meant to allow them to live without working. The term generally applies to the retired, and in this sense, it means a source of funds that allows the retiree to gain a secure income for the rest of their life.

Post Dated Check – A post dated check is a check that carries a date sometime in the future and thus can be cashed by the bearer only on or after that date.

Credit Ratings/Score – A credit rating report is a record of an individual’s past and present liabilities and documentation of the regularity of payments made on these liabilities. A credit score is a three digit number, typically between 300 and 850, that quantifies the individual’s credit history and their ability to repay their debts in a timely manner. The higher the score, the better your credit rating. These reports are meant to help a lender determine an individual’s creditworthiness and their applicable rate of interest.