Money Terms, in Plain English

A

Alternative credit bureau

Many subprime lenders check these instead of, or as well as, the big three bureaus. A clean history here can get a low-FICO borrower approved.

APR

Annual Percentage Rate. Federal law requires lenders to show it before you sign. Because it annualizes the cost, a two-week loan with a $15-per-$100 fee shows an APR of almost 400% even though you pay $15. Use our calculator to turn any APR into a dollar total.

Used on: What Tribal Lending Means for You · Credit Union PAL Loans · What APR Really Costs

C

Cost ladder

Cheaper steps always appear before expensive ones on every page. Start at the top and move down only when the step above won't work for you.

Used on: What Tribal Lending Means for You · How to Get Out of Payday Loans · Installment Loans for Bad Credit

Credit-builder loan

A savings plan that builds payment history. It doesn't provide cash today.

Used on: Credit Score Ranges, Explained · Best Credit-Builder Loans

D

Debt management plan

Plans usually run three to five years with a modest monthly fee. They can't include most payday or tribal loans unless the lender agrees.

Used on: Non-Profit Credit Counseling

E

Extended payment plan

Many states require payday lenders to offer one if you ask before the loan is due. Ask in writing using those exact words.

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F

Finance charge

Interest plus fees, added together. It must appear in the Truth in Lending disclosure next to the APR and the total of payments. It's the number this site shows first.

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H

Hard pull

Banks, most card issuers and some lenders use them. Several hard pulls in a short window look like distress to other lenders — pre-qualify first.

Used on: Credit Score Ranges, Explained · Best Loans for Bad Credit

I

Installment loan

The structure is easier to manage than a payday loan, but the APR can still be several hundred percent. Most lenders on step 5 of the ladder are installment lenders.

Used on: What Tribal Lending Means for You · Credit Score Ranges, Explained · Best Cash Advance Apps

L

LIHEAP

It's a grant paid to the utility, not a loan. Income limits apply but are higher than most people assume. Apply through your state agency or ask 211.

Used on: Call 211 First · Help Paying Rent and Utilities

M

Military Lending Act

Because most lenders on this site charge more than that, they can't lend to covered borrowers. Service members can get help from their base's financial readiness office.

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P

PAL (Payday Alternative Loan)

PAL I lends $200–$1,000 for 1–6 months after a month of membership; PAL II lends up to $2,000 for 1–12 months with no waiting period. Step 2 of the ladder and usually the cheapest loan open to someone with bad credit.

Used on: Credit Union PAL Loans · How to Get Out of Payday Loans · Best Loans for Bad Credit

Payday loan

If you can't repay in full, many lenders let you roll it over for another fee — which is how the cost can pass the amount borrowed within a few months. Step 6 of the ladder.

Used on: What Tribal Lending Means for You · Credit Union PAL Loans · Non-Profit Credit Counseling

Provisional score

The customer-experience criterion (15% of the score) is filled in after a CFPB and BBB review. Until then the score carries a "Provisional" tag and can change.

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R

Representative example

Lenders that advertise rates must show a representative example. Scale it to your amount: if $1,000 costs $2,000 to repay, $500 on the same terms costs about $1,000.

Used on: What APR Really Costs · Installment Loans for Bad Credit · Best Loans for Bad Credit

Rollover

Each rollover adds a full fee without reducing what you owe. Many states limit or ban rollovers; extended payment plans are the way out.

Used on: How to Get Out of Payday Loans

S

Secured credit card

Approval is much easier than for an ordinary card and payments are reported the same way. Pay it off in full every month and it costs nothing to hold.

Used on: Installment Loans for Bad Credit · Credit Score Ranges, Explained · Best Credit-Builder Loans

Soft pull

Most apps and many subprime lenders use soft pulls or alternative bureaus. You can pre-qualify with several soft-pull lenders at no cost to your score.

Used on: Credit Score Ranges, Explained

T

Total of payments

Sometimes called "total repaid". On a $500 loan at 779.97% APR over 224 days it's about $2,437.

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Tribal lender

Tribal lenders generally aren't bound by state rate caps, so they can lend where state-licensed lenders won't and often charge more. Federal law still applies; disputes usually go through the tribe's regulator and arbitration.

Used on: What Tribal Lending Means for You · Non-Profit Credit Counseling · creditcube review