Payday Glossary

Annual percentage rate: Also known as the APR, the annual percentage rate represents the annual or yearly rate of interest attached to a payday loan. The APR is typically calculated as the total interest to be paid within a year divided by the outstanding balance.

Assets: Personal property or possessions, such as a home, car or other valuables that are used as collateral against secured personal loans.

Bad credit personal loans: Specialized loans for individuals with poor credit that need a loan to finance their personal needs but lack any type of collateral.

Bankruptcy: Individuals usually file for, or declare bankruptcy when they are no longer able to pay off their debt to various creditors and other financial institutions.

Cash advance: Also referred to as a payday loan, cash advances offer borrowers an advanced sum of money in exchange for repayment on their next payday. Borrowers are able to use the money for the purpose of financing their immediate financial needs.

Collateral: This term refers to some type of security that is usually put up against a loan by borrowers. In most cases, the collateral used includes a borrower’s home, automobile or any other type of valuable asset.

Credit counseling agencies: Credit counselors that work with bad credit loan borrowers in an effort to redeem their credit status by helping them in creating and sticking to a manageable budget, negotiating with lenders, paying off their debt and developing a debt-management plan to prevent future financial problems from re-occurring.

Debt consolidation: The act of combining an individual’s debt into a single loan that requires repayment, in comparison to multiple amounts. Personal loans can be used towards debt consolidation and help individuals achieve debt relief.

Educational bills: Expenses related to educational purposes, such as a child’s school tuition, university fees etc. Personal loans can help finance school-related costs, including the purchase of a computer or laptop.

Extended repayment plans: Provides borrowers with payment relief by enabling them to lengthen the repayment term of their personal loan. Extended repayment plans essentially allot borrowers with extra time to pay off their loan without having to default on payments.

Fast Payday loan: Also referred to as a cash advance, a fast payday loan allows individuals to obtain funds quickly in order to finance their personal needs.

Financial hardship: Financial hardship can occur when an individual’s income is no longer able to support his/her cost of living. In some cases, debtors can seek a payment plan in order to pay off their debt when going through hardship.

Financial loan disclosures: The specific terms and conditions of personal or payday advance loans which lenders are required to disclose before individuals make a commitment to borrow the loan. Financial loan disclosures typically include information on the term and type of interest rate attached to the loan.

Financial sustenance: The ability for individuals to survive financially until their next payday when their funds have depleted. Cash advance loans can often provide people with financial sustenance.

Fixed interest rates: Companies that offer loans with fixed interest rates charge a set rate of interest that does not fluctuate over the life of the loan.

Free cash advance quotes: Free estimations that can be obtained by visiting cash advance loan comparison sites. Being able to get multiple quotes also allows potential borrowers to get a better idea of the exact loan amount they can borrow based on their income.

Guaranteed personal loan: Secured personal loans that require applicants to put up security against the loan in the form of their property, automobile or valuable jewelry for approval purposes. Guaranteed personal loans usually have lower interest rates attached to them because the funds are secured with the borrower’s personal assets.

Hidden fees: Any fees that are not disclosed by cash advance payday loan companies to borrowers during the on-set of the loan process. Thus, they are referred to as “hidden fees” because borrowers are not made aware of them initially and most often discover such costs after making a commitment to borrow the loan.

High-rate transfers: An effective way for personal loan borrowers to budget financially by transferring higher interest rate balances to credit cards with lower rates.

Impulse buys: Purchases that individuals make unintentionally or without pre-planning. Impulse buys are often frivolous items that are purchased at the spur of the moment.

Instant cash loans: Loans that provide individuals with access to instant cash when they need it most. Many people turn to instant cash loans when they need to finance some type of financial emergency situation that may occur expectedly.

Loan applicant: The individual who applies for a personal or cash advance payday loan.

Late fees: Fees that payday loan companies charge to borrowers when they fail to make loan repayments in a timely manner. The specific amount charged for late fees varies with each loan company.

Loan cancellation: The act of terminating a payday loan agreement, which is usually initiated by the borrower.

Loan repayment terms: The length of time in which a borrower must repay their loan amount. It’s also extremely important for borrowers to ensure that the loan repayment terms given by companies provides enough time for them to pay off their debt.

“Loan sharks”: An exaggerated term that is most often identified with payday loan lenders who are thought to prey on innocent victims or borrowers when they are in desperate need of some fast cash. The term loan shark is also applied due to the outrageously inflated interest rates that some payday loan lenders tack on for the purpose of turning over a profit.

Low interest personal loans: Personal loans that individuals can borrower at lower interest rates.

Market competition: The competitive nature of the payday loan industry which often results in lenders competing for business in the market.

No credit check requirement: An attractive feature of the payday loan process, in which lenders do not require a credit check in order to grant loans. Individuals with poor credit history can benefit most with the no credit check requirement rule as it is typically applied to bad credit loans which they can qualify for.

No obligation: Signifies the ability for potential loan borrowers to obtain quotes and find out further information about terms, conditions etc. without having to make a commitment or be obliged to borrow the loan amount indefinitely.

No fax cash advance payday loans: Unsecured cash advances that enable borrowers to submit their loan application paper-less, thereby eliminating the need of faxing in documents. Going through the process of applying for a no fax payday loan online is quick, convenient and hassle-free, as numerous trips to the post office are completely unnecessary.

Non-profit financial counseling programs: Financial counseling programs that specialize in helping loan borrowers achieve effective financial management. They are able to assist in analyzing expenses and income, creating a suitable budget and a spending plan that allows borrowers to utilize their finances productively.

Online budget calculators: Personal loan computing tools that allow individuals to better determine their financial budget by assisting them in the calculations of monthly loan payments, assessing income in comparison to expenses, and determining the exact amount of savings that can be achieved.

Online loan applications: Forms that are available for potential loan borrowers to fill out and submit online.

Online payday loans: Payday loans that individuals can apply for through the Internet. Online payday loan companies make it easier for borrowers to apply and become approved for a loan without having to leave the comfort of their own home.

Online payday loan requirements: Certain criteria that borrowers must satisfy in order to get approved for online cash advance payday loans. The basic requirements that most online companies enforce include being at least 18 years of age, having a valid checking or savings account, showing proof of employment, and meeting the minimum monthly income requirements.

Overdraft fees: Fees that banks charge to customers when they withdraw money from their account without having sufficient funds, i.e. the term “insufficient funds”. Overdraft fees can often be avoided with the help of cash advance loans.

Overdraft protection: A preventative feature that borrowers can request on their checking account which serves to protect them from the financial ramifications of incurring bounced check fees.

Payday loan companies: Companies that offer cash advance payday loans. Most people apply for payday loans during financial emergencies only, as companies tend to charge higher interest rates for cash advances in comparison to traditional loans.

Payday loan stores: On-site locations where potential borrowers can go and apply for a payday loan.

Payment deadline: A specific date (that is usually pre-determined), in which borrowers must repay their loan amount to the lending institution. Failure to pay in a timely manner can often lead to certain monetary repercussions, including having to pay extra money in late fees.

Penalty fees: Charges that loan borrowers can incur from lending institutions due to a variety of reasons, including habitual lateness in monthly repayment installments, bounced checks resulting from insufficient funds and defaulting on the loan.

Personal loans: Loans that allow individuals to finance their personal needs. Most people take out personal loans for the purpose of financing large purchases, such as a home or car. Personal loans can also be used for making home improvements, taking a vacation, paying for school tuition or financing costs associated with wedding expenditures.

Personal loan lenders: Financial lending institutions such as banks, credit card companies, and mortgage lenders that specialize in offering personal loan products.

Savings plan: An amount of money that is specifically set aside, usually in an individual’s savings account for unforeseen financial emergencies. Having a savings plan helps individuals finance unexpected bills without having to borrow excessive amounts of money in loans.

Secured personal loan: A personal loan that requires individuals to put up collateral against the amount being borrowed. Many borrowers use their assets (home or car), as security to borrow the loan amount. Risking personal assets is a major factor when it comes to secured personal loans, as lenders have the legal right to repossess and sell them in order to recover what is owed.

Unexpected bills: Any kind of expenses that can come up unexpectedly, requiring an individual’s immediate financial attention. Some examples of unexpected bills include those which can result from financial emergency situations, such as medical expenses, car repair bills, and late credit card payments.

Unsecured personal loans: Personal loans that do not require borrowers to put up any type of collateral against the loan. Individuals who lack the type of needed collateral for a secured loan or those who are simply not comfortable with using their home or car as security often opt for unsecured personal loans. The biggest disadvantage of unsecured personal loans are the higher interest rates which are attached, due to the higher risk posed to lenders.

Variable interest rates: Unlike fixed rates, the variable interest rates which are attached to personal loans can change and fluctuate based on current market rates and trends.