ACH - This stands for automatic clearing house, which is mainly a method used to transfer funds to and from bank accounts.
ARP or Annual Percentage Rate - This is the cost of credit which is expressed in a yearly rate. This is not the same as contract interest rate.
Balance - This refers to the outstanding in your bank account.
Bankruptcy - This is a legal proceeding in America's Federal Court which in entered into by a borrower. This is often someone who is not able to pay back his debts which allows for them to negotiate some form of partial payment or the selling of a borrower's assets. Bankruptcy information will stay on the credit history of a person for up to a decade.
Cash advance - This refers to a source of cash which can be taken in the case of emergencies. This is for people who are employed but may not have access to other sources of credit. This is meant to bridge the financial gap in between now and the next pay day. The interest is charged from the date it is advanced.
Checking account - The money which is kept in savings or a bank for safekeeping. This money can be withdrawn easily by simply writing out a check or using an ATM machine.
Credit - The promise to pay the amount at a later date for services or goods availed presently.
Credit application - A request for credit given in writing. At times an application fee will be charged in order to cover the cost of processing the loan.
Credit counseling - A type of counseling which is provided by organizations aimed at helping consumers with ways to repair their credit so as to get their financial affairs back on track.
Credit limit - The most amount of money which is allowed to be charged on a line of credit or credit card.
Credit line - This is also often referred to personal line of credit and is the maximum amount a person can get against his or her account. Once the credit line has been repaid the person can then re-borrow against this account.
Credit report - This is a report which is actually the history of a person's debt repayment, outstanding debts, bankruptcies and late payments. It will also have his or her bankruptcies.
Debt - The amount which is owed to a lender.
Debt Consolidation - This refers to a strategy which is at times used by people to improve their debt management issues. Instead of opting to pay several bills every month a consumer will just pay his debt with one bill to one financial institution.
Default - The failure to pay back a loan or meet the terms the loan agreement.
Delinquency - Failing to pay on time.
Direct Deposit - This is an electronic funds transfer directly to a bank account, so paper check is not needed.
E-Signature - Often referred to as an electronic signature this requires a software which binds your signature or some other mark to a document. The E-sign bill was passed by the government in June 2000 which legalizes this signature.
The Fair Credit Reporting Act - This is a federal law which gives borrowers the right to lean exactly what info credit reporting agencies currently have on them, it also enables them to dispute incorrect data.
Fair Debt Collections Practices Act - This is a federal level law that works to protect people from abusive or harassing conduct or misleading and false representations for debt collection.
FDIC or Federal Deposit Insurance Corporation - Usually a federal agency which insures a consumer's deposit in their savings and for a loan of up to $100,000 for every account. These deposits will include savings and checking accounts and also deposit certificates.
Finance charge - Credit costs expressed in a dollar amount.
Installment loan - This is a loan that has a predetermined number of payments and loan amount.
Interest - A fee that the lender charges for borrowing a sum of money.
Interest rate - A rate that a lender will charge borrowers in order to borrow money from them. It is expressed in percentage % per annum.
Late payment fee - This is a charge for a payment which is not received in time.
Lender - A business or a person who lends or even offers loans to people.
Payday Loan - A short-term loan which is borrowed and is repaid on your next or following payday along with the interest charges.
Loan Agreement - This is a legal contract which details the conditions, repayment date and the repayment terms of the loan.
Truth in Lending Act - This is a federal law which mostly requires lenders to be able to disclose to their borrowers the actual cost of the loan. This will include the actual interest rate as well as the terms and conditions of this loan in an easy to understand fashion.
Unsecured loan - This is a loan given on the bases of a borrower's word to pay back.
Variable interest rate - This is an interest rate which will change based on the current index, like a prime rate.