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Home arrow PayDay Loan Glossary
PayDay Loan Shopper Glossary
Annual Percentage Rate- APR
The effective interest rate charged over a period of one yeay for a loan. The percentage rate is a result of the calcualtion considering the total amount financed and the finance charges.
Bad Credit
Bad Credit is a financial industry term used to describe someone who is considered a "high risk" to lenders and other finance companies due to repayment history of loans, mortgages and other financial aid. This type of borrower usually considered to be at very high risk of defaulting on their payment obligations set forth by the lender.
Cash Advance
A cash advance is also sometimes referred to as a payday loan. A cash advance is a small amount of loan being lent for a short amount of time. A typical cash advance loan is about $500 and has to be paid back within 30 days. These types of loans are usually given without a credit check and it’s intended to bridge the borrower's cashflow gap between pay days.
Consumer Advocates
Consumer advocacy groups are the so called public defenders of consumer rights against gauging and overcharging by unscrupulous payday loan lenders and cash advance companies. These groups regularly lobby government representatives to make changes to the payday lending laws to protect consumers from being overcharged for small personal loans.
Credit Check
An inquiry performed in a private database that stores consumers’ payment history of different types of loans from different lenders. Credit checks can uncover late payments, NSF checks and other irregularities that can alert the lender to a potentially risky loan to the consumer. The credit checks usually report a credit score to report the consumer's credit worthiness.
Faxless PayDay Loan
A term adopted by the PayDay loan industry to let borrowers know they don't have to submit their loan application form via a FAX machine. Most online PayDay loan companies accept applications for cash advances over the Internet.
Interest
The amount of money charged by a lender to a borrower for the use of their money. It's often calculated as an annual percentage rate and it can be fixed or variable. In the cases of PayDay loans the effective interest rate can ad up to several thousand percent on an annual basis.
PayDay Loan
A payday loan is a short-term loan for a relatively small sum of money, provided by a non-traditional lender. Th average payday loan is valued at $200-$250 and is extended for a period of 1 to 30 days.