Understanding the terminology used in personal lending can help you make informed decisions. Here are common terms you may encounter:
The annual cost of borrowing money, expressed as a percentage. APR includes the interest rate plus any fees associated with the loan.
An electronic network for financial transactions in the United States. ACH transfers are commonly used for automatic loan repayments.
A numerical representation of your creditworthiness, typically ranging from 300 to 850. Higher scores indicate better credit history.
A detailed record of your credit history, including loans, credit cards, payment history, and other financial information.
Failure to repay a loan according to the terms agreed upon in the loan contract.
The percentage of the loan amount that a lender charges as interest for borrowing money.
A charge imposed by a lender when a borrower fails to make a payment by the due date.
The length of time you have to repay a loan, typically expressed in months or years.
A fee charged by some lenders to process a new loan application.
A fee some lenders charge if you pay off your loan early. Most lenders in our network do not charge prepayment penalties.
The original amount of money borrowed, excluding interest and fees.
Extending a loan by paying only the fees and interest, while the principal amount remains due.
A credit inquiry that does not affect your credit score. Used for pre-qualification purposes.
A credit inquiry that may affect your credit score. Typically performed when you formally apply for credit.
A loan that does not require collateral. Personal loans are typically unsecured.