Payday Loan Glossary

Annual Percentage Rate (APR): This is the true or effective interest rate.  The interest rate includes all finance charges and the amount financed.


Bad credit: A term synonymous with lack of credit worthiness.  Characterizes borrowers who are unable to make their payday loan payment on time or not at all and must take out a bad credit loan


Caps: Strict governmental limits placed upon the cash advance and payday loan lenders as to the maximum interest rates that can be charged for loans.


Cash advance: Another name for a payday loan. It is shot-term personal loan used by borrowers to cover urgent cash needs until the next payday. 


Credit check: An important step in approving a payday loan. Loan lenders evaluate the borrowers’ credit histories before deciding to approve or disapprove the payday loan applications. 


Delinquency: The inability of borrowers to meet their debt obligations.


Direct deposit: The payday loan funds are electronically deposited into the borrower's bank account.


Extension: More time requested by the borrower to pay-off the payday cash advance loan.  


Faxless payday loan: A popular online method of applying for a cash advance without faxing an application to the lender.


Finance charge: The interest rate on the payday loan amount that payday loan borrowers must pay.  Included in the total loan repayment.


Interest rate: A rate that a payday advance lender charges to the borrower for the loan. 


Payday advance: Same as a cash advance. See definition of Cash Advance. 


Payday Lender: The financial institution that issues payday loans.


Personal loan: An unsecured payday loan that is a short term loan, mainly used in emergency situations. 


Principal: The amount of the payday loan borrowed, excludes interest.


Renewal:  Renewing your existing payday loan.  A new loan is generated and the old one is paid off, includes applicable fees.  Also, the renewed payday loan is due by the next pay period.


Rollover: The payday loan lender agrees to extend the payday loan to an agreed upon renewed repayment term.