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.