The following is a list of terms used throughout BoostFinance.com and the loan process. If you are uncertain of a phrase or term encountered, you can always check here.
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Annual Percentage Rate (APR)
The cost of credit, expressed as a yearly rate.
Automated Clearing House (ACH)
A method of transferring funds to or from bank accounts.
Balance Due
The amount of money due on an account.
Bankruptcy
A legal proceeding in U.S. Federal Court, entered
into by borrowers who are unable to pay their debts
that allows them to negotiate partial payment or
the sale of the borrower’s assets to partially
pay back the debt.
Budget
A plan for the management of spending and saving of money.
Charge Off
A loan or credit card debt written off as
uncollectible from the borrower and often
the borrower has sold or assigned the debt to
a collection agency. This debt, however,
remains valid and subject to collection.
Checking Account
Money kept in a bank
for safekeeping. Money can be easily withdrawn
by writing checks or using an ATM or debit card.
Collateral or Security
An asset pledged to ensure payment of a debt.
Credit
A promise to pay at a later date for
goods or services purchased today.
Credit Application
A written request for credit, generally in a
form specified by the lender. Sometimes an
application fee is charged to cover the
cost of loan processing.
Credit Access Business (CAB)
A company that helps a consumer obtain a loan
from an unaffiliated third-party lender.
Credit Access Business (CAB) Fee
A fee charged by a Credit Access Business for helping
a consumer obtain a loan from an unaffiliated
third-party lender.
Credit Bureau
A company that compiles credit histories on prospective
borrowers and provides credit reports to lenders.
Lenders use these reports when making decisions
on extending credit. The three major credit
reporting agencies are Equifax, Experian and
TransUnion.
Credit Card
A card issued by a bank authorizing payment for purchases. Interest is charged on the outstanding balance.
Credit Counseling
Professional counseling provided by organizations that help
consumers find ways to repay their credit and get their financial
affairs in order through the careful budgeting and
management of money.
Credit Limit
The maximum amount of money that may be charged
on a credit card account or line of credit.
Credit Line or Personal Line of Credit
The maximum loan amount a consumer can borrow. As a credit line is partially or fully repaid, the consumer can borrow against the account again.
Credit Report
A record of someone's credit history, including outstanding debts, debt repayments, late payments and any bankruptcies that is compiled by a credit reporting agency.
Creditor
A person or business from whom you borrow, or to whom you owe money.
Debit Card
A card issued by a bank, or other financial institution, and used for making purchases. The purchase amount is deducted directly from your checking account or other accounts.
Debt
Money owed to another party.
Debt Consolidation
A strategy sometimes used by consumers to better manage their debt problems. Rather than paying off several separate bills each month, a consumer consolidates his or her debts with a financial institution that will arrange for one lower monthly payment extending over a period of time.
Default
Failure to repay a loan or otherwise meet the terms of a loan agreement.
Delinquency
Failure to make timely payments.
Direct Deposit
An electronic transfer of funds to a bank account whereby there is no need for a paper check.
Equal Credit Opportunity Act
A federal law prohibiting lenders from discriminating against applicants for credit.
E-Signature or Electronic Signature
Electronic signature software binds your signature, or other mark, to a specific document. In June 2000, the U.S. government passed the E-sign bill, which gives electronic signatures the same legality as hand-written ones.
Fair Credit Reporting Act
A federal law giving consumers the right to learn what information credit reporting agencies have on file about them and to dispute any inaccurate data in the file.
Fair Debt Collections Practices Act
A federal law to protect consumers from any harassing or abusive conduct, the use of false or misleading representations or unfair practices in the collection of debts.
Federal Deposit Insurance Corporation (FDIC)
A federal agency that insures consumer deposits in a bank for up to $100,000 per account. Deposits include checking and savings accounts and certificates of deposit.
Finance Charge
The cost of credit expressed as a dollar amount.
Fixed Interest Rate
An interest rate that does not change over the term of the loan.
Installment Loan
A loan in which the amount of payment and the number of payments are predetermined.
Interest
The amount a lender charges a customer for borrowing money.
Interest Rate
The rate that lenders charge their borrowers for borrowing money. Usually expressed in terms of percentage per year.
Late Payment Fee
A fee charged for a loan payment not received by the due date.
Lender
A person or business who lends or offers loans to customers. Also referred to as a creditor.
Liable
Having legal responsibility.
Loan
An amount borrowed to be repaid at a later date, with interest.
Loan Agreement
A contract that spells out in detail the terms and conditions of a loan.
Refinance
Paying off an existing loan with the proceeds from a new loan which is usually done to get a lower interest rate.
Repossess
Forced or voluntary surrender of merchandise as a result of a consumer's failure to repay a loan as promised.
Right of Rescission
A borrower's right to cancel a contract with no cost or penalty (most often, three calendar days).
Secured Loan
A loan in which a borrower pledges an asset such as a home or car that may be sold if the borrower is unable to repay the loan.
Security
See collateral.
Simple Interest
Interest computed on the principal balance outstanding as long as any portion remains unpaid.
Title
A legal document that provides evidence of property ownership.
Truth in Lending Act
A federal law that requires lenders to disclose to the borrower the true cost of a loan, including the actual interest rate and all terms and conditions of the loan, in a manner that is easily understood.
Unsecured Loan
A loan granted based only on the borrower's promise to repay and not based off of collateral.
Variable Interest Rate
An interest rate that changes based on an index, such as the prime rate.
Yield
The effective rate of return paid on a savings or money market account or bond.
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