At Plain Green, we believe in simplicity and plain-speaking. We realize there’s a lot of loan jargon and lingo out there, so we’ve developed this list of frequently used financial terms to help you.
An ACH (Automated Clearing House) is a transaction processed through an automated clearinghouse network which facilitates many electronic interbank funds transfers. An automated clearinghouse is operated for the benefit of a number of banks in order to efficiently process the transfer of funds electronically. Since an ACH typically operates only on weekdays, you may notice disclaimers like “next business day.”
This process allows you to make automatic payments and not miss a due date. You provide the bank with written permission for your lender to withdraw a specific dollar amount on specific dates directly from your account.
This legal document makes a loan official. The agreement formalizes the terms of the loan between you and the lender. When you sign a loan agreement, you enter into a contract that holds you responsible for paying back the money borrowed and any additional interest and fees.
APR (Annual Percentage Rate) is the interest payable on the amount borrowed plus other fees expressed as an annual rate of charge.
If you’ve missed one or more loan installments, then you’re in arrears. Payment overdue? You’re in arrears. People in arrears can have trouble qualifying for future credit, so talk to your creditors before your situation deteriorates further. Seek alternatives for making payments if you fall behind.
Assets are anything you own that has financial value. Your cash, property, stocks and bonds, even your home electronics are considered assets.
A balance can be the amount of money in your bank account. It can also indicate how much you owe a lender to pay off your loan.
An alternative to a quick, easy and convenient Plain Green loan. Bank loans can involve a meeting with your bank manager and are subject to approval.
A check “bounces” when your bank account doesn’t have enough funds to cover payment. (See NSF below) The bank returns the check to the payee - unpaid. Now, in addition to still owing money to the intended recipient, the bank will most likely charge you a substantial fee.
Preparing and keeping a simple budget is one of the best things you can do to stay on top of your finances. A budget tracks your cash inflows (paycheck, interest and other income) vs. outflows (rent, groceries, gas, utilities and other expenses), so you can see what, if anything, is left.
A cash advance is money provided against a prearranged line of credit such as a credit card or a loan agreement. It can also describe a small loan made over a short period of time.
Financial Institutions provide various services and customers pay for the convenience and resources made available. Fees include interest charges and cash advance charges. Additionally, if their services are misused or terms are broken, many institutions assess penalties, including overdraft charges, bounced check fees and late payment fees.
Checks and electronic payments go through this process when paid into your account. The clearing cycle time can vary based upon the type of credit.
A credit bureau, or credit reporting agency collects data from numerous sources and provides information on individual consumers. Lenders use this information, sometimes in the form of a credit rating [hyperlink to credit rating, on this page], to help them assess the credit worthiness and the likely ability of someone to pay back a loan. Examples of credit bureaus in the US are Trans Union, Experian and Equifax.
Your credit limit is the maximum amount of money that you can borrow. The lender typically determines this amount based on a number of factors.
Credit ratings (or credit scores) are typically used by financial institutions to help them assess the credit worthiness of an individual, corporation, or even a country. They are typically derived from a number of factors including financial history and current assets and liabilities. Typically, a credit rating indicates the probability a subject will be able to pay back a loan.
This document summarizes your credit history, including information from credit bureaus, banks, retailers and collection agencies. It can also include details of your borrowing, applications for credit, court judgments and bill payment behavior. You can request a free copy of your credit report from the credit bureaus.
Debt is money owed to a person or company.
Paying back a loan before the arranged due date. Some banks charge fees for doing this. Not at Plain Green – you can pay your loan off in installments or all at once, at any time, without penalties.
A fixed-rate remains the same throughout the entire loan term.
The larger of the two income numbers on your paycheck. Your gross income is the amount your employer pays you before taxes, insurance, retirement contributions and other withholdings are deducted.
You can look at this in two ways. Interest can be the amount you earn on your savings and investments. Interest is also the amount you pay on money you borrow. Commonly expressed as a percentage, interest is often included in the total cost of a loan. (See APR [hyperlink to APR, on this page]).
A loan is money borrowed on condition that it’s paid back per the agreement [hyperlink to agreement, on this page]. There are several types of loans, including a quick and convenient short-term installment loan from Plain Green.
The loan period is simply the length of time you borrow money. It can last any number of days up to years depending upon the terms of the agreement [hyperlink to agreement, on this page]. In most cases, interest continues to accrue throughout this repayment period.
The smaller of the two income numbers on your paycheck. This is your “take-home pay”, or the amount remaining after all deductions, such as taxes, insurance, and retirement contributions have been subtracted from your gross income.
Stands for Non-Sufficient Funds and means you didn’t have enough money in your account to cover your payment. Unfortunately, your financial institution will most likely assess you with additional fees or penalty charges [hyperlink to penalty charges on this page].
Online banking (e-banking or internet banking), refers to banking services available via the web. These programs typically allow you to check your balance, order checks, pay bills, make a cash transfer, and perform other services.
This is the amount that remains to be paid back on a loan. For example, when you make regular payments on a Plain Green loan, your outstanding balance goes down with each installment.
This is another term to describe a payday loan [Hyperlink to payday loan, on this page].
A payday loan, or payday advance, is a short-term loan that's intended to cover expenses until you get paid. The lender typically charges a fixed fee based on the amount borrowed and you have until your next payday to pay it off — regardless of when you apply. Payday loans often help people who can't get credit elsewhere. An Plain Green installment loan is typically a less costly and more flexible emergency cash alternative.
These fees are typically assessed after you have broken the terms of your agreement for things like bounced checks [HYPERLINK TO ‘bounced check’ on this page] or Non-Sufficient Funds (NSF [hyperlink to NSF, on this page]).
This is the date that you say you will repay your loan or make a payment on your loan.
Rate refers to the level of interest [HYPERLINK TO INTEREST, ON THIS PAGE] charged by a lender, and is usually expressed as an Annual Percentage Rate (APR).
Basically, it’s the movement of money. When you withdraw cash from your account, that’s a transaction. Make a loan payment? Transaction.
A loan payment that is less than the amount you’re expected to pay on a specific date. Last Updated: March 27, 2013