EZ-Personal-Loans.com has put together this loan glossary
to help educate you regarding some frequently used expressions
associated with personal loans. If you have any additional questions
regarding the terms below or general questions about our service, don't hesitate to
Percentage Rate (APR)
The total finance charge (including interest, points, and other finance
charges) expressed as a percentage of the amount financed.
Bremer allows you to make automatic payments on your loans or lines of
credit from your Bremer savings or checking accounts. This means a set
payment amount is automatically taken out of your account every month
on the day specified.
Collateral (or security)
Personal property pledged as a guarantee that you will repay your loan.
Property such as houses, cars, savings accounts, bonds, or certificates
of deposit are commonly used as collateral.
Organizations that collect individual consumer credit information and
provide credit reports to potential lenders, employers, landlords, etc.,
for purposes of aiding in their decision-making process.
The difference between the current value and the outstanding liens on
The total cost of interest and other charges, direct or indirect, the
borrower must pay to obtain credit.
An interest rate the borrower locks into at the origination of the loan
and does not change during the term of the loan.
The indicator of current economic conditions used to determine changes
in adjustable loan interest rate.
A charge for money borrowed generally stated as a percentage of the amount
An extension of credit subject to a variable interest rate that may be
borrowed against when needed and paid back in the same manner and under
the same terms as a loan.
A written promise to pay a stipulated sum of money to a party under mutually
agreed upon conditions. Also called a promissory note.
When an overdraft occurs on an account, meaning the balance of the account
becomes negative, funds are automatically transferred from a line of credit
linked to the account to cover the negative balance. Overdraft protection
prevents the consumer from having to pay overdraft charges.
Payment Protection Insurance
Credit insurance that provides life insurance which pays a lump sum toward
a personal loan or line of credit upon the death of the borrower or co-borrower.
Also, disability insurance for the primary borrower that pays monthly
benefits toward the loan or line payment when life insurance is also purchased.
An amount equal to one percent of the loan amount.
A penalty fee charged to a borrower who pays off a loan before the term
of the loan is complete.
The most favorable interest rate
charged by lenders on a short-term loan to qualified customers. There is
also a prime rate average listed in the Wall Street Journal that is an
average of what the largest commercial banks charge. Rates (APRs) are
established as the prime rate plus an additional amount.
The loan amount not including interest.
Secured Personal Loan
A fixed interest rate personal loan that requires collateral or security
of a savings account, stocks, bonds, certificates of deposit, etc.
The time limit within which a loan must be repaid.
Rights of ownership of property.
Insurance (including Owners and Mortgage policy)
Insurance which protects the lender and the homeowner against loss resulting
from any defects in the title or claims against a property that were not
uncovered in the title search.
The process of determining risk inherent in a particular loan and establishing
suitable loan terms and conditions.
Unsecured Personal Loans
A fixed interest rate personal loan that requires no collateral or security.
Variable Interest Rate
An interest rate which is tied to an index, such as the Wall Street Journal
Prime, and fluctuates during the life of the line of credit.
Bad Credit Loan
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