Loan glossary

Loan terms, explained.

A plain-English dictionary of 21+ US lending terms. Tap any card for a deeper guide.

APR (Annual Percentage Rate)

The yearly cost of a loan including interest plus fees, expressed as a percentage.

The percentage a lender charges on the principal — excludes fees.

An upfront fee a lender charges to process a new loan.

An interest rate that does not change over the life of the loan.

An interest rate that can change over time based on a benchmark index.

A credit check that does not affect your credit score — used for pre-qualification.

A formal credit check that can lower your score by a few points.

An estimate of loan terms a lender may offer you based on a soft credit check.

A conditional commitment from a lender after a deeper review.

A three-digit number summarizing your credit risk (typically 300–850).

A detailed history of your credit accounts, balances, and payments — maintained by Equifax, Experian, and TransUnion.

Your monthly debt payments divided by your gross monthly income — a key approval factor.

Someone who agrees to repay your loan if you don't — used to qualify or get better rates.

A loan backed by collateral (a car, savings account, home) the lender can claim if you default.

A loan that requires no collateral — approval is based on creditworthiness.

A fee some lenders charge if you pay off a loan early.

The schedule that splits each payment between interest and principal over the loan term.

The original amount borrowed, excluding interest and fees.

Combining multiple debts into a single new loan — ideally at a lower rate.

Your written permission for lenders to contact you by phone or text, required by federal law.

California laws granting residents rights to know, delete, correct, and opt out of the sale of their personal information.