Applications and agreements can sometimes get a little complicated. We want you to understand the language of lending. Here are explanations for some of the key terms you’re likely to come across.
ACH: Automated Clearing House, an electronic network for financial transactions in the United States. ACH processes millions of transactions every day, including payroll direct deposits and vendor payments. ACH is the way your loan payments get to Balance Credit as an EFT (Electronic Funds Transfer) from your bank account (as long as there are sufficient funds in your account on the payment due date).
APR: Annual Percentage Rate. APR is a percentage number that represents the actual yearly cost of funds over the term of a loan. This includes interest plus any fees or additional costs associated with the transaction.
Clearing Cycle: The time it takes for a check you deposit in your bank to be fully credited to your account. The clearing cycle is typically two to five business days.
Credit Access Business (CAB): In Texas, Balance Credit is not the lender. It is a CAB that assists customers in obtaining an extension of consumer credit from an unaffiliated third party lender.
Credit Bureau: Also known as a credit reporting agency. Two well-known credit bureaus are Experian and TransUnion. These bureaus collect data from credit card companies and other lenders and assign a credit score to each consumer.
Credit Limit: The amount of credit that a credit card company or other lender extends to a customer. A good credit score and history of borrowing and repayment may increase your credit limit.
Credit Report: A detailed report from a credit bureau that lenders like Balance Credit use to determine a customer’s eligibility to borrow money.
Credit Services Organization (CSO): In certain states, Balance Credit is not the lender. It is a CSO that assists customers in obtaining an extension of consumer credit from an unaffiliated third party lender.
CSO Fee: A fee that Balance Credit charges in exchange for credit services including guaranteeing a loan.
Credit Score: The number assigned to you by a credit bureau. The higher your credit score, the more likely you are to be approved by a lender, and the lower the interest rate you’ll be charged.
Early Repayment: Sometimes lenders will charge a customer a penalty or fee for paying off a loan early. With a loan from Balance Credit or the lender Balance Credit works with, you are never charged for early repayment.
EFT: Electronic Funds Transfer. An exchange of money from one person or company to another, through a computer-based system such as ACH. This is the fastest way to move money.
Fixed-Rate Interest: An interest rate on a loan that does not change for the life of the loan. All loans from Balance Credit or the lender Balance Credit works with, charge fixed-rate interest.
Gross Income: The amount of pay you receive at your job before taxes and other deductions.
Installment: One of a series of payments made over the life of a loan (the loan period).
Interest: Money paid regularly at a particular rate for the use of money lent.
Loan Agreement: A legal contract that makes your loan official. The loan agreement includes the terms, conditions, costs, APR and other details including the responsibilities of the borrower and the lender.
Loan Period: The amount of time a customer has to repay a loan.
Net Income: Sometimes called “take-home pay,” net income is the amount of pay you receive at your job after taxes and other deductions.
NSF: Non-Sufficient Funds. A description of the situation when you don’t have enough money in your account to cover checks and scheduled payments. NSF is often associated with additional charges from your bank.
Outstanding Balance: The amount of your loan’s principal and pre-paid finance charge (if any) you still owe.
Penalty Charges: Charges from your bank or lender for not paying on time, or not having sufficient funds in your bank account.
Principal: The original amount of money borrowed. Your loan repayment includes principal, interest, and fees.
Promise Date: Another name for your loan payment due date.
Underpayment: An amount paid on a loan that is less that the amount stated in the loan agreement. Also known as a “partial payment.”