Personal Loan Glossary
At Lendah we try and make understanding your online personal loan as easy as possible. To help, we’ve provided brief definitions financial terms you’ll see on this website.
If anything you see is still unclear, you can always call us at 844-860-0766 and we’ll be happy to help.
Annual Percentage Rate (APR)
The total finance charge (including interest, points, and other finance charges) expressed as a percentage of the amount financed.
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.
A record of your current and fully repaid debts. Your credit history helps banks and other financial services providers determine whether you have a history of repaying debts in a timely manner. This will help determine your creditworthiness.
If a debtor is struggling to make their monthly repayments, a debt administrator (attorney) can apply to the court to extend the loan term. The debt administrator will then determine the money needed for the debtor’s basic needs while the rest of the money will be used to pay off their debts. These payments often become a salary deduction in order to ensure that the debts are paid.
Gross Monthly Income
Line of Credit
Minimum Loan Amount
Net Monthly Income
Secured Personal Loan
Total Loan Repayment
Unsecured Personal Loan
Some lenders charge a fee for arranging and processing the application of your loan.
A borrower is a person who receives funds in the form of a loan. The borrower is responsible for the repayment of the funds over a set period of time.
Credit Agencies/Credit Bureaus
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.
A credit rating or score is a points system based on your borrowing and repayment history. The credit rating is used by banks and other financial services providers to determine whether a loan should be granted based on your risk profile.
Debt consolidation is when a debtor takes out one loan to pay off other smaller loans or debts. This is usually done to secure a lower interest rate. It also makes monthly repayments easier as the debtor is paying off one loan instead of many different ones.
The difference between the current value and the outstanding loans on a property.
Fixed Interest Rate
An interest rate the borrower locks into at the origination of the loan and does not change during the term of the loan.
A debtor will be declared insolvent when he has insufficient funds and is no longer able to pay his debts. Assets may be liquidated to pay off outstanding debts.
A formal document that sets out the rights and obligations of the lender and the borrower.
Maximum Loan Amount
This is the maximum amount which can be borrowed under the loan agreement.
Monthly Loan Repayment
The monthly loan repayment is the amount of money that must be paid to the Personal Loan provider every month.
A written promise to pay a stipulated sum of money to a party under mutually agreed upon conditions. Also called a promissory note.
An amount equal to one percent of the loan amount.
The loan amount borrowed, not including interest.
Term of Loan
The time limit within which a loan must be repaid.
The process of determining risk inherent in a particular loan and establishing suitable loan terms and conditions.
Variable Interest Rate
An interest rate which is tied to an index and fluctuates during the life of the line of credit.