Glossary


At Lendah we try and make understanding your loan as easy as possible. To help,
we’ve provided brief definitions of all the financial terms you’ll see on this website.

If anything you see is still unclear, you can always call us at 833-453-6324
and we'll be happy to help.

1Annual Percentage Rate (APR)
The total finance charge (including interest, points, and other finance charges) expressed as a percentage of the amount financed.
2Application Fee
Some lenders charge a fee for arranging and processing the application of your loan.
3Automatic Payment
A set payment amount is automatically taken out of your account every month on the day specified.
4Borrower
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.
5Collateral (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.
6Credit 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.
7Credit History
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.
8Credit Rating/Score
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.
9Debt
An amount owed for funds borrowed. The debt may be owed to individuals, banks, or other financial services providers.
10Debtor
A debtor is an individual or company that owes money.
11Debt Administration
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.
12Debt Consolidation
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.
13Default
Default occurs when a debtor fails to make the necessary repayments on a loan.
14Equity
The difference between the current value and the outstanding loans on a property.
15Finance Charges
The total cost of interest and other charges, direct or indirect, the borrower must pay to obtain credit.
16Fixed 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.
17Gross Monthly Income
Gross monthly income is the amount of money earned before taxes or deductions are taken into account.
18Insolvent
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.
19Interest Rate
A charge for money borrowed generally stated as a percentage of the amount borrowed.
20Line of Credit
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.
21Loan Agreement
A formal document that sets out the rights and obligations of the lender and the borrower.
22Loan Amount
The loan amount is the amount borrowed from the lender. This is the amount that the debtor will receive in their bank account.
23Maximum Loan Amount
This is the maximum amount which can be borrowed under the loan agreement.
24Minimum Loan Amount
This is the minimum amount which the lender can borrow under the loan agreement.
25Monthly Loan Repayment
The monthly loan repayment is the amount of money that must be paid to the Personal Loan provider every month.
26Net Monthly Income
The net monthly income is the amount of money that is left after taxes and deductions have been taken into account.
27Note
A written promise to pay a stipulated sum of money to a party under mutually agreed upon conditions. Also called a promissory note.
28Personal Loan
A Personal Loan is a financial contract in which one party borrows a specific amount of money from another party that is to be paid back over an agreed upon period of time. It is a type of loan that can be used when experiencing long- or short-term cash flow problems.
29Point
An amount equal to one percent of the loan amount.
30Prepayment Penalty
A penalty fee charged to a borrower who pays off a loan before the term of the loan is complete.
31Principal
The loan amount borrowed, not including interest.
32Secured Personal Loan
A fixed interest rate Personal Loan requires collateral or security in the form of a savings account, stocks, bonds, certificates of deposit, etc.
33Term of Loan
The time limit within which a loan must be repaid.
34Total Loan Repayment
This is the total loan amount plus the interest charged on the loan.
35Underwriting
The process of determining risk inherent in a particular loan and establishing suitable loan terms and conditions.
36Unsecured Personal Loan
A fixed interest rate Personal Loan that requires no collateral or security.
37Variable Interest Rate
An interest rate which is tied to an index and fluctuates during the life of the line of credit.