Top 10 Personal Loan Terminologies Used in Finance World

Top 10 Personal Loan Terminologies Used in Finance World


Millions of Americans use loans to cover unexpected expenses, home improvements, debt consolidation and much more. It seems the basics are quite straightforward like the one that avails student loans for higher studies, the one for a loan to buy a car, a mortgage loan to purchase a house and so on and so forth. To add to the list these days there is one more loan type that is gaining rapid fame as it is flexible, easy to apply for, usually offers low interest rates (if your credit score is good) and the loan amount is smaller when compared to other loan types. By now you should have guessed it right, as it is called a personal loan. Make your finance partner and apply online today!

Recent developments in loans can be attributed partly to the financial crisis, to the historical regularities taking into account the severity of the past recession and the loan supply factors exerting a considerable descending pressure on loans growth since the beginning of the financial tensions that started around a decade ago. As a result these days lending options are many like- banks, p2p lending, credit unions and the latest -online lenders. Online lenders are introducing new types of loans to make it easier for customers to avail and utilize. Any loan sanctions are generally based on a combination of the borrower's income, the credit history and the loan terms.

So if you have thoughts about taking a loan for any reason, it is good to know a few prevailing loan terminologies before jumping the bandwagon. Here are the top ten:

1. Annual Percentage Rate

  • APR stands for Annual Percentage Rate and in a simple language it is the numeric representation of your interests rate expressed as a percentage depicting the actual yearly cost of your funds over the period of a loan.
  • It can be fixed or variable.
  • Types of APR include purchase APR, cash advance APR, promotional APR and penalty APR.
  • According to the division of finance in Missouri, the APR=FEE (Origination fee + Interest) ÷ Amount Financed ÷ Number of days in loan × 365 × 100

2. Credit History

  • It is basically a record of consumers. From that, one could check the borrower's ability to repay debts and acts as a demonstration of a responsible debt repayment over a period of time.
  • It is represented through a credit report sourced by banks, credit card companies, collection agencies, governments and it includes the details of the consumer's credit account like when it was opened, the account balance, transactions history and other information.
  • One can call the Annual Credit Report at 1-877-322-8228 and follow the instructions to check their credit history.

3. Collateral

  • According to Investopedia, a collateral is a property or other asset that a borrower offers as a way for a lender to secure the loan. If the borrower fails to make promised loan payments, the lender can seize the collateral to recover its losses.
  • Loans backed by collaterals typically have lower interest rates compared to unsecured loans.
  • House or home equity, cars, your investments and savings can be assets that could help you qualify when borrowing with collateral loans.

4. Debt-to-income ratio(DTI)

  • DTI or debt-to-income is calculated by dividing total recurring monthly debt by the gross monthly income, and expressed as a percentage.
  • It is a method to measure an individual's ability to manage monthly payments and debts.
  • Low DTI means you are less risky to lenders.

5. Debt-Consolidation

  • It simply means taking out a single loan to pay off a number of other loans/ debts.
  • Helps to pay off a number of liabilities and mostly unsecured consumer debts.
  • Multiple debts are combined into a larger piece of debt with favorable payoff terms like a lower interest rate or lower monthly payment or both.

6. Lien

  • It is a legal claim or the right for the lender to take possession of a property /an asset if the debt repayment doesn't happen as agreed.
  • In legal terms it is a formal document signed by the party to whom money is owed and sometimes by the debtor who agrees to the amount due.

7. Principal

  • It is the total amount owed on a loan excluding interest or the money that you originally agreed to pay back.
  • We all are aware of the simple interest calculation formula [A=P (1+RT)] which implies the cost of borrowing based on the principal amount.
  • Any payment made on a loan will be applied first to any fees that are due for example, late fees then the rest of your payment will be applied to the principal balance of the loan.

8. Installment

  • It is defined as a sum of amount payable as one of several equal payments for something, spread over a contracted duration that may be months or years.
  • Having a loan of a specific amount that is paid back according to a set schedule.
  • It can also be single payment.

9. Repayment Term

  • It is the amount of time or the duration within you need to repay the loan.
  • The longer the loan the lower your payments but higher are the overall interest charges.
  • Periodic payments include part principal plus interest.
  • Can be monthly, semi-annual or annual for long term loans.

10. Prepayment Penalty

  • Some lenders impose charge/fees on a borrower who opts to pay off part or whole of the loan in advance. This is known as prepayment penalty.
  • Lenders do this to mitigate prepayment risk because if the borrower pays the loan off early lender loses future interest on the loan payments.

Your rate on loans may vary substantially based on the lender you choose. Several new lenders have entered the market and for a while, American consumers did not have that option. With the rapid growth of online lending, consumers finally have a choice and now that you are well-known with popular loan terminologies, hope you are ready to apply.

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6 Habits For Women Who Want To Live And Love To Their Fullest

A simply sweet story about finding more joy because I was inspired by a friend's beautiful heart, and I hope that you too are inspired and find what makes you happy.


I was inspired by a friend the other day to write this post. It's so funny how some people seem to bring out the best in us or that words they say can trigger us. Meeting up with my old friend and reconnecting always brings an overwhelming amount of joy.

Here are my recommendations to bring around better vibes!!!

1. I'm recommending being around high-quality people. Personally, I'm most joyful when I'm around people that bring me up and who love and support me. This sounds like a duh, but seriously we have all had that friend or so-called friend who really doesn't do that for us. So my number one tip would be to find friends that seek to make you rise. That tell you when your behavior needs checking. That celebrated with and for you when your accomplished something. That cry by your side when things are not right, it may be a boy, a job gone bad, a failed paper, big or small they have your back. So find yourself your girl gang. Mines small, but I have complete trust in them and that's what makes all the difference.

2. Practice being joyful. What I mean by this is if your not very happy fake it and keep PRACTICING being happy. Eventually, you will be. So how do you practice being happy?

Journal what you're thankful for.
Do a random act of kindness for someone else.
Being the bigger person.
Give people genuine compliments.

Trust me these little or simple things can brighten your day.

3. Realize that you're not alone. There are so many people around us so when you find the right ones talk to them. Get out whatever is holding you back off your chest. Tell someone you trust what's up and I'd recommending praying too. There is so much out there that's bigger than ourselves and many people can relate to you so, don't be afraid to ask for help or advice if you need it. As well try not to get too down on yourself.

4. Find peace in your heart. This doesn't mean forget what hurt you or allow a toxic person in your life but to be present and in the moment you need to settle your past. Make sure that you are forgiving to others and that you be a bigger person, to move forward.

5. Give to others. The next thing I'd recommend is to serve someone else. It always feels good after to give your time, support, a gift, or wisdom to someone that's in need of it. I know you are looking to be happier but sometimes the way to unlock this is by helping someone else so seek to always be kind to others. Only seeking more for yourself leads to selfishness and greed which ultimately never are going to leave you fulfilled.

6. Lastly, I'd recommend listening to happy music, helpful podcasts, go to church, or pick up a new exciting hobby, such a painting. Just do something that makes you feel good.

Hopefully, these tips help to make you find more happiness in your everyday life. They are simple and very Manageable if you just make the time to do them.

Best of luck girlies, xoxo

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How you can Enhance your Marketing Campaign with the the help of proper Content Marketing

Hey SEO Friends,

I am pretty sure that you are familiar with the concept of Content Marketing. But most of you probably never really went in-depth into this topic. I think you are missing out on something.


From our own experience we can tell you that content is the most underrated factor in a marketing campaign.

Most people worry about unnecessary factors while they should take a look at their content. Think about it: If you have significantly good content (no matter if it´s written, audio or video), people will naturally talk about you.

That´s the truth. And while you still have to take the time to distribute your content, I can tell you that you will have a much easier time to get attention to your content.

You may wonder why producing the best content out there will work?Because Marketing and Content is like Ying and Yang - It synergizes perfectly.

The process will look like this:

  • -You create awesome content
  • -You distibute the content
  • -People will see your content
  • -If your content stands out, visitors will remember it and talk about it with their friends (Viral Cycle Time)
  • -More people will see your content
  • -You don´t need to distribute it anymore
  • -It will automatically turn into a viral loop

All of this is only possible if you produce significantly better content than your competitors. People want to remember you as the expert. If you can show that you know what you are talking about then other people will grasp on that and think of you as the main person in your field!

We are pretty sure that you can at least DOUBLE your marketing results with proper content marketing. Do your own testing right now but we can assure you that no matter what you do (SEO, SMM, PPC, etc...) - Content will always remain the Foundation of a successful Marketing Campaign.

If you want to read more about this topic, and learn how you can use content marketing as a gateaway for a more successful marketing campaign, then make sure to take a look at our most recent blog post:

So now our question to you: Do you feel like you currently focus enough about your content creation? If not then why?

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