Loan glossary
Plain-language definitions of the terms you’ll see in offers, loan agreements and on our site.
A
- Amortization
- Paying off a loan in equal installments over its term. Early payments cover more interest; later payments cover more principal.
- Annual percentage rate (APR)
- The yearly cost of a loan, including interest and certain fees. It’s the best single number for comparing offers. Through Loans Today, APRs range from 5.49% to 35.00%.See APR ranges
- Automatic payments
- Payments a lender takes from your bank account on a schedule, usually by ACH transfer. Your loan agreement explains how to change or stop them.
C
- Credit bureau
- A company that collects credit information and produces credit reports. The three national bureaus are Equifax, Experian and TransUnion.
- Credit report
- A record of your credit accounts and payment history. You can get a free copy from each national bureau at AnnualCreditReport.com.
- Credit score
- A number that summarizes your credit report and helps lenders estimate risk. Late payments and some credit inquiries can lower it.
D
- Default
- Failing to repay a loan as agreed. Default can lead to collection activity and serious harm to your credit history.
F
- Fixed APR
- An APR that stays the same for the whole loan, so every monthly payment is equal. Our calculator and representative examples assume a fixed APR.Try the calculator
H
- Hard credit inquiry
- A credit check a lender makes when you apply for credit. It appears on your credit report and may lower your score. A provider may perform one if you continue with its offer.
I
- Interest
- The charge for borrowing money, calculated on the amount you still owe. Interest is part of APR.
L
- Late fee
- A fee a lender may charge when a payment arrives after its due date. Late fees are set in the loan agreement.
- Loan agreement
- The contract between you and the lender that sets your amount, APR, fees, payment schedule and other terms. It controls over anything shown in our app or website.
- Loan term
- How long you have to repay a loan. Through Loans Today, terms range from 3 to 30 months, and no provider may require repayment in full in 60 days or less.
- Loan-matching service
- A service that passes your request to participating lenders and providers, who decide whether to make an offer. Loans Today is a loan-matching service, not a lender.About Loans Today
M
- Military Lending Act (MLA)
- A federal law that gives active-duty servicemembers and their dependents extra protections, including a 36% cap on the military annual percentage rate for many types of consumer credit.
- Monthly payment
- The amount you pay each month. With a fixed APR, it stays the same for the whole term and includes both principal and interest.
O
- Origination fee
- A one-time fee some lenders charge for processing a loan. It is included in the APR a lender shows you.
P
- Prepayment penalty
- A fee for paying a loan off early. Some providers do not charge one; check the loan agreement.
- Principal
- The amount you borrow, not counting interest or fees.
- Provider
- A participating lender or lending partner that may review your request and present an offer through Loans Today.
R
- Refinancing
- Replacing a loan with a new one, often to change the rate or term. Renewing or refinancing may add fees and interest.
- Representative example
- An illustration of what a loan could cost, based on a specific amount, term and APR. It is not an offer.See our examples
- Returned-payment fee
- A fee a lender may charge when a payment is returned, for example because there wasn’t enough money in your account.
S
- Soft credit inquiry
- A credit check that does not affect your credit score and is visible only to you. Some providers use one to decide whether they can make you an offer.
T
- Total interest
- Everything you pay on top of the amount you borrow over the life of the loan.
- Total repayment
- The full amount you pay back: principal plus all interest. Compare this number between offers, not just the monthly payment.Estimate it
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Definitions are general information, not financial or legal advice. Your loan agreement defines the terms that apply to you.