Cash Store and Personal Loan Glossary, A–Z

Terms from A to B explain how the cost of a personal loan is stated and how each payment shrinks the balance. Read APR and amortization first, because most other definitions on this page build on them.

Amortization

Amortization is the schedule that splits each fixed payment between interest and principal. Early payments carry more interest because the balance is highest, and the final scheduled payment brings a personal loan to zero.

Annual Percentage Rate (APR)

APR is the yearly cost of borrowing as a percentage, including interest and required fees such as an origination fee. Offers from lenders in our network typically run 5.99% to 35.99% APR, depending on credit and state. APR is the fair way to line up a personal loan offer against a cash store quote that lists only a flat fee; see the personal loan rates by credit tier.

Autopay discount

An autopay discount is a small APR reduction some lenders give when payments are drafted automatically from checking. Confirm whether an advertised APR already assumes autopay before you compare offers.

Balance transfer

A balance transfer moves card debt to another card, usually one with a low promotional rate for a set number of months. Issuers typically charge a transfer fee, and the regular rate returns when the promotion ends. Some borrowers weigh it against debt consolidation loans with a fixed rate.

Buy now, pay later (BNPL)

Buy now, pay later splits one purchase into a few installments at checkout. Short plans often charge no interest when paid on time, though late fees can apply. BNPL covers one merchant, while a personal loan sends cash to your bank account.

C terms describe your credit profile and the people or property that can back a loan. Lenders weigh these factors when they set an APR, which is why two offers for the same amount can differ.

Charge-off

A charge-off happens when a lender writes off a debt as unlikely to be collected, often after about six months of missed payments. The debt still exists, may go to collections and stays on credit reports for seven years.

Co-signer

A co-signer signs the loan and agrees to repay if the main borrower does not. A co-signer with stronger credit can help an application, but missed payments hurt both people’s credit.

Collateral

Collateral is property pledged to secure a loan, such as a vehicle or savings account. If you default, the lender can take it. Some cash store loans use a car title as collateral, which puts the car you drive to work at risk.

Credit report

A credit report is the bureaus’ record of your accounts, balances, payment history and inquiries. Free copies are available through the official annual credit report website, and fixing errors before you apply can lift your score.

Credit score

A credit score is a three-digit summary of repayment risk. In our example ranges, excellent credit (720+) may see about 8% to 15% APR and scores below 630 about 28% to 35.99%. A storefront cash store may skip a traditional score check, one reason its fees run higher.

Credit utilization

Credit utilization is the share of your revolving credit limits you are using. Carrying $1,500 on $5,000 of card limits equals 30%. Paying cards down with a fixed-rate personal loan can lower it quickly.

D through F covers how lenders measure your existing debt, what happens when payments stop and how money reaches your account. Debt-to-income ratio is the term most likely to decide whether a lender says yes.

Debt consolidation

Debt consolidation combines several debts into one new loan with a single payment. It saves money only when the new APR and fees cost less than the old debts; our personal loan payment calculator shows the monthly side of that math.

Debt-to-income ratio (DTI)

DTI is your monthly debt payments divided by gross monthly income. Earning $4,000 and paying $1,400 toward rent, a car and cards gives a DTI of 35%. Many lenders cap the DTI they accept; see the eligibility requirements for other factors.

Default

Default means failing to repay a personal loan as the contract requires, usually after several missed payments. It can bring collections, a charge-off or loss of collateral, so call the lender about hardship options before you fall behind.

Direct deposit

Direct deposit is an electronic transfer into your bank account. Lenders in our network usually fund this way, often the next business day after approval, depending on the lender. A cash store may hand over cash the same day, typically at a higher cost.

Electronic signature

An electronic signature is a legally binding way to sign a personal loan agreement online, often by typing your name. Read the APR, fees and due dates before you sign.

Fixed rate

A fixed rate stays the same for the life of the loan, so the payment never changes. Most personal loans between $500 and $5,000 carry fixed rates.

Funding time

Funding time is how long money takes to reach your account after approval, often the next business day with lenders in our network, depending on the lender and your bank. Document checks and weekends cause most delays.

G through L terms cover payment timing, credit checks and the structure of a standard installment loan. Hard and soft inquiries matter most in this range, because they explain how comparing offers affects your score.

Grace period

A grace period is a short window after a due date when a payment can arrive without a late fee. Not every personal loan has one, and payments 30 or more days late can still be reported to the bureaus.

Hard inquiry

A hard inquiry is the credit check a lender runs when you formally apply, and it can trim a few points for a while. It stays on your report for two years, though scoring models often count several same-type inquiries in a short window as one.

Installment loan

An installment loan is borrowed as a lump sum and repaid in equal payments over a set term. Personal loans and many cash store loans are installment loans, though storefront terms tend to be shorter and costlier.

Interest

Interest is the price of borrowing, charged on the unpaid balance. On an amortizing personal loan, the interest share of each payment shrinks as principal falls.

Late fee

A late fee is a charge added when a personal loan payment arrives after the due date or grace period. It may be a flat amount or a percentage, subject to state limits, and autopay is the easiest way to avoid it.

Lender network

A lender network is a group of lenders that review requests from a connector service such as ours. We pass your request to lenders in our network, and each lender sets its own rate, term and fees. Our service is not a lender.

Loan term

The loan term is how long you have to repay, typically 3 to 36 months with lenders in our network. As an estimate, a $2,000 loan at 22.99% APR costs about $257.68 in interest over 12 months and $786.76 over 36 months.

M through P defines the numbers printed on every loan offer: monthly payment, principal and fees. Origination fees and prepayment penalties change the true cost of borrowing, so look for both before comparing APRs.

Monthly payment

The monthly payment is the fixed amount due each month, covering interest and principal. In our representative example, $2,000 over 18 months at 22.99% APR is about $132.42 a month, assuming no origination fee.

Non-sufficient funds (NSF) fee

An NSF fee is what your bank charges when a payment draft hits an account short of money, and the lender may add a returned-payment fee. Some cash store agreements ask for a post-dated check, which carries the same risk.

Origination fee

An origination fee is a one-time processing charge, usually deducted from your funds. Some lenders charge about 1% to 10% of the amount and some none. A 5% fee on $3,000 means you receive $2,850 but repay $3,000.

Payment plan

A payment plan lets you pay a bill in installments directly to a hospital, dentist or funeral home, often interest-free. A personal loan instead pays the provider in full and leaves you owing the lender, so ask about a plan first.

Prepayment penalty

A prepayment penalty is a fee for paying off a loan early. Many personal loans in the $500 to $5,000 range carry none, but only the agreement confirms it. Paying early without a penalty cuts total interest.

Prequalification

Prequalification is an early estimate of whether a personal loan lender may approve you and on what terms, often based on a soft inquiry. It is not final until the lender verifies your details.

Principal

Principal is the amount you borrow, before interest. Even when an origination fee is deducted from the funds, the principal you repay is the full loan amount.

R and S terms cover replacing old debt, reading advertised examples and the gap between secured and unsecured credit. Soft inquiries also land here, and they explain why checking estimated offers leaves your score untouched.

Refinancing

Refinancing replaces an existing loan with a new personal loan, usually for a lower APR or smaller payment. It helps only when the new total cost, fees included, beats what remains on the old loan, such as a high-cost cash store balance.

Representative example

A representative example is a sample loan used to show what borrowing might cost. Ours is $2,000 over 18 months at 22.99% APR: about $132.42 a month and $2,383.56 total, including $383.56 interest, with no origination fee assumed.

Revolving credit

Revolving credit lets you borrow, repay and borrow again up to a limit, as with a credit card. The payment changes with the balance, and there is no fixed payoff date.

Secured loan

A secured loan is backed by collateral the lender can claim if you default. It may bring a lower APR but puts the property at risk; a car title loan from a cash money store is one example.

Soft inquiry

A soft inquiry is a credit check that does not affect your score. Lenders use soft pulls for prequalification, and a hard inquiry usually follows only when you accept an offer and move to final approval.

State rate cap

A state rate cap is a legal ceiling on the APR lenders can charge in that state, and it varies by loan size and license. People searching for the cash store near me often find storefront products follow different state rules than online personal loans.

Storefront lender

A storefront lender makes small loans in person, such as a cash store or pawn shop. Readers who type cash store near me usually want same-day cash, but storefront products often cost more than an installment loan, so ask for the APR in writing.

T through Z covers the full cost of a loan and the review a lender runs before approval. Underwriting is the step where an estimate becomes a final offer, so these terms explain what happens after you accept.

Title loan

A title loan is a short-term loan secured by your car title. Title loans are often sold at a storefront cash store with high fees, missed payments can lead to repossession, and many states restrict them.

Total cost of borrowing

Total cost of borrowing is everything you repay beyond what you received. As an estimate, $1,000 at 24.99% APR over 12 months costs about $140.48 in interest, and $205.52 at 35.99%.

Underwriting

Underwriting is the lender’s review of a personal loan application: credit, income, employment, bank account and identity, sometimes with requests for pay stubs or ID. Approval is never guaranteed, and the final offer can differ from an estimate.

Unsecured loan

An unsecured loan has no collateral, so the lender relies on credit and income. Most personal loans from $500 to $5,000 are unsecured, and the APR leans heavily on your credit score.

Variable rate

A variable rate moves with a benchmark index, so the payment can rise or fall. Credit cards often use variable rates, while most personal loans are fixed.

Verification

Verification is when a lender confirms the income, employer, address and bank account on your personal loan request. Quick, accurate answers often shorten the gap between approval and funding.