Understanding Cash Loans: A Comprehensive Listing of Loan Terms and Definitions

Fast cash loans are the most effective way to get access to immediate funds for any type of urgent expense. If you need to apply for an emergency cash loan, it is important that you understand how payday advances work. The following list of definitions can help you to become better informed on the terminology involved in the cash advance lending business.

Account Balance

The total amount of money remaining to be paid on a loan.

Bad Credit

A term used to describe a poor credit score due to a bankruptcy, late payments, or failure to repay an obligation. Many individuals are qualified to receive unsecured cash loans even with bad credit.

Bad Credit Lenders

Companies who specialize in offering short-term cash loans to individuals with compromised credit histories who are trying to rebuild their credit.

Bad Credit Cash Loans

Loan products designed for individuals who are unable to obtain financing through conventional lending, such as bank loans. Bad credit loans typically do not require a credit score for approval.

Cash Advance

A short term, unsecured cash loan, usually ranging from $100 to $1500, that is generally repaid at the recipient’s next pay date.

Cash Loans

Cash taken out against a line of credit or as a personal loan; similar to a cash advance, cash loans are typically due when the borrower receives his or her next paycheck.

Collateral

Also known as security, collateral is an asset which a borrower pledges as security in return for a fast cash loan; if the borrower defaults on the loan, the asset may be seized as partial satisfaction for the amount owed. Same day cash loans generally do not require any collateral.

Credit Check

An evaluation process where a potential lender assesses the likelihood that certain borrowers will pay back their cash loans, based on their credit history and other factors.

Credit History

A record of a person’s borrowing and repayment behavior; a credit history will typically include current and past banking, lending, and credit accounts, amounts borrowed, late payments, and bankruptcy.

Credit Rating

A detailed professional evaluation, published through a certified agency, of a person’s borrowing and debt repayment history. The credit rating is used to determine an individual’s likelihood to repay cash loans and other obligations.

Credit Score

A numerical measure of a person’s credit risk based on their past history of borrowing and repayment.

Default

Failure to repay a debt according to the terms of borrowing. Defaulting on a cash advance loan can negatively affect your credit history.

Due Date

The agreed-upon date upon which a pay day cash loan is to be repaid.

Fees

Charges for specified services, such as processing a loan application or handling funds. Not the same as interest.

Interest

The sum of money charged by a lender, usually as an annual percentage of the amount of a cash loan; the percentage rate is based on a number of factors, including the amount borrowed, the loan term,and the credit risk of the borrower. Also known as the interest rate.

Installment

A regular payment that a borrower gives to a lender at periodic intervals in order to satisfy a loan. While most cash advance loans are repaid in full on the pay date following receipt of funds, many lenders will accept repayment in smaller installments (usually at a higher interest rate).

Loan

A financial arrangement where a lender agrees to give money to a borrower, and the borrower agrees to return the money at a predetermined time, usually with interest and other fees added in consideration for the use of the cash advance.

Online Personal Loans

Cash loans obtained from internet lending companies in consideration of interest and fees, usually repaid on the borrower’s next payday.

Pay Period

The duration of time (usually weekly, biweekly, or monthly) during which the amount a worker has earned is calculated.

Personal Loan

Cash loans given to an individual, as opposed to a business or other entity.

Principal

The total amount borrowed, or not yet repaid, excluding any accrued interest or fees.

Refinance

To repay cash loans with the proceeds from new cash payday loans. A borrower may refinance a payday loan by paying off the interest and fees that are currently due, then extending the due date for the principal.

Remit

To send in a payment on a loan. While some lenders will ask you to mail your payment, in most cases the funds you owe will be automatically deducted from your checking account when you get paid.

Short Term Loan

A fast cash loan given for a short period of time, usually less than one year. Payday loans are short term loans (up to one month) which the borrower agrees to repay on his or her next pay date.

Unsecured Loan

A type of loan that is given without collateral, usually for a short period of time. Online payday loans are normally unsecured; payday lenders compensate for the lack of security with higher interest rates.

Wire Transfer

A means of electronically transferring funds from one bank account to another. When lenders approve cash loans, they frequently send the cash to the borrower’s bank account via wire transfer; once the funds reach the borrower’s account, they become immediately available for use.

Fast cash payday loans can be a great way to build or repair your credit, take care of unforeseen expenses, and bridge the gap between paychecks. However, it is up to you to make sure you understand fully what you are getting into. Always read the full disclosure on the loan terms, and if you don’t understand something, be sure to ask for clarification. Be sure that you are aware of all your obligations and that you can afford to repay the amount you borrow, plus the interest and fees.

At Cashadvance.com, we link you to a wide network of reputable payday lenders who compete to offer you the best deal on a short-term loan. Let us help you find the cash you need to get back on your feet and take control of your financial future.