The Essential Installment Loan Glossary Of Terminology To Know
Credit, APR, principal, and other terms are often thrown around regarding installment loan terminology, but what do they really mean? We’re here to break down the most common vocabulary you’ll run into if you’re inquiring about an installment, title, or payday loan – in words you can understand.
We’ll cover terms like:
- Credit and credit check
- Fixed vs. variable rates
- Gross vs. net income
- Loan term and loan terms
- Secured vs. unsecured loans
- And more…
Important Installment Loan Terminology
APR is something you’ll discover in any glossary of installment loan terminology. It is the annual percentage rate and reflects the cost – usually combining interest and any other fees – charged for a loan over a year. Remember to distinguish this term from APY, or annual percentage yield, which is the interest you earn when you save your money in designated accounts.
Collateral is any property or asset you offer to prove you’ll pay back a loan. If you don’t repay the loan, the lender could collect the collateral. However, at Carolina Title Loans, Inc., we let you keep your car – AKA collateral – while you’re paying back a title loan.
A co-signer is another person who legally vouches for your ability to repay a loan. If you stop paying the loan, the co-signer must fulfill the loan agreement.
When it comes to loans, credit is usually measured in the form of a credit score. This score gives lenders an idea of your ability to repay a loan. Unlike banks and other lenders, Carolina Title Loans, Inc. encourages applications from those with all types of credit – even bad credit.
A credit check is when a lender inquires about your credit score and history. Soft credit checks are quick reviews that don’t affect your credit score. A hard credit check may impact your credit score by up to four points, and it stays on your report for two years.
Defaulting on a loan is when a borrower doesn’t repay the loan as they had agreed to. If you put up collateral for a loan, the collateral could be legally collected by the lender if you default.
Fixed vs. Variable Interest Rate
A fixed interest rate is agreed upon when signing for the loan and doesn’t change. A variable interest rate is subject to change during the life of the loan.
Gross Income vs. Net Income
Some lenders will look at your gross and net income when checking if you qualify for a loan. Gross income is all the money you make in one month or a year, whereas net is the total income minus your expenses and taxes.
The definition of installment loan is a loan that’s given and then repaid through set scheduled payments. The installments are the fixed repayments listed in your loan terms. Usually, these payments are made monthly.
A loan term could be the total amount of time you have the loan, whereas loan terms include the total loan amount, fees, interest rate, and the consequences of defaulting. Loan terms may vary per individual.
You’ll see the principal under all payday, title, and installment loan terminology. It is the total amount of money you’re borrowing. For example, a signature installment loan from Carolina Title Loans, Inc. could give you a principal of up to $1,500 to borrow.
Secured Loans vs. Unsecured Loans
Secured loans require collateral, such as a title loan that uses your car’s lien-free title to back the loan.
Unsecured loans, such as our signature installment loans, do not require you to offer any collateral to qualify for a loan.
Essential Details About Installment Loans
Now that you know installment loan terminology and the definition of installment loan, it’s time to decide if this loan is a suitable option for you.
If you have a car loan or mortgage, you may already be familiar with an installment loan. Thankfully, Carolina Title Loans, Inc. offers signature installment loans to face financial emergencies.
If you suddenly find yourself with a broken car, a home in need of repairs, or an unexpected medical bill, you may benefit by receiving up to $1,500 through one of our signature installment loans.
What You Need To Apply
To apply for a signature installment loan at Carolina Title Loans, Inc., you only need three things:
- Driver’s License or State Issued I.D.
- A Checking Account Statement That’s Open In Your Name
- Your Most Recent Pay Stub
You do not need good credit or collateral to apply.
How To Apply
Once you have those three things, please fill out the online form on our homepage. A representative will call you as soon as available and plan a time to meet at one of our local offices. Bring in your documents for review, and our team will answer any questions you may have.
If approved, you could have your cash that same day or the following business day.
Put Your Knowledge To Good Use – Get Your Cash Today
Some urgent bills just can’t wait. If you’re low on cash and want to clear a debt fast, consider one of our short-term loans. The definition of installment loan means you can pay us back over time, alleviating your stress of making ends meet by the end of this month.
Now that you know the most important installment loan terminology, it’s time to start your application process. Less than an hour of your time could result in over $1,000 in your bank account!
Head online, then meet with us this week. We’re looking forward to chatting with you.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.