Payday loan terminology
Posted on Thursday, August 6th, 2009 at 8:11 pm in General Payday Loan Tips, Helpful Payday Loan Info, Miscellaneous Cash Loan Info
People who are experiencing financial difficulties that require them to look for a payday loan (or cash advance) are usually under a lot of pressure because of their economic troubles. They really don’t need the added stress that comes from having to decipher the financial jargon they encounter on online payday loan sites. Roll over, APR, principal, delinquency – what on earth does it all mean?
Naturally, you need to read and understand the fine print of the contract before you sign up for an online cash advance. Here is a useful list of common payday loan terms and what they mean. Keep it at hand when you’re reading through payday lenders’ websites trying to decide which one to apply to.
Amortize: To pay off a loan in installments as set out in your loan agreement. Each amortization usually consists of part of the loan principal, plus applicable interest. With a payday loan, you’re meant to repay the full amount next time you receive your salary. However, you can often extend the loan by paying another fee.
APR: Annualized Percentage Rate. This is the cost of holding a loan for a whole year. If the fee is $17.65 per $100 for a two-week payday loan, that translates to an APR of 460%.
Bad credit: This means most lenders see you as having a poor ability to pay back your debts, and might turn down your application. Payday lenders don’t care about bad credit, and primarily grant loans on the basis of income.
Balance: The amount you owe on your loan.
Bankruptcy: When you declare that you can’t pay your debts and hand over your assets for distribution to your creditors. Your debts are canceled, but a note is placed on your credit report for 7-10 years. You can still obtain a paycheck loan if you’re bankrupt.
Collateral: An asset you put up as security for a loan. No collateral is necessary for a payday loan.
Default: When you can’t pay back your loan.
Delinquent: When your payments are late and you break the terms of the loan agreement.
No-fax payday loan: A cash advance you apply for online by filling out a form, but don’t need to fax supporting documents to the lender.
Payday loan: A short-duration loan of $100 to $1,500 to be paid back from your next paycheck.
Prepayment: Paying back all or part of the loan before it’s due.
Principal: The amount you borrowed. The entire principal of a payday cash advance is due for repayment on your next payday.
Refinance: To extend your payday loan for another two weeks (or an agreed time period) by paying a further fee.
Roll over: This also means to extend your loan for another term. To roll over your loan you’ll need to pay the finance fee again. Some states have restrictions on the number of times you can do this.
Term: The duration of each loan period – usually two weeks for a payday loan.
Related posts:
3 Easy Steps to Get Your Quick Cash
Complete the short form.
Receive your approval and confirm loan.
Cash deposited into your account.
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