Glossary of Terms
- Late payment
- A delinquent payment; a failure to deliver a loan or debt payment on or before the time agreed.
- Lender
- A person or company that offers to lend money to a borrower for a given period of time. The borrower is obliged to repay the loan with installments or single payment together with specified interest.
- Lien
- Legal document used to create a security interest in another's property. A lienLegal document used to create a security interest in another's property. is often given as a security for the payment of a debt. A lienLegal document used to create a security interest in another's property. can also be placed against a consumer for failure to pay the city, county, state or federal government money that is owed.
- Line of credit
- A line of credit works like a credit card except you do not charge purchases. Instead, a person with a line of credit would use checks to make purchases which are drawn on a line of credit rather than on an amount on deposit. A line of credit will have a maximum amount or limit.
- Loan origination rate
- The percentage the lending institution charges to cover some of its processing costs in making a loan in addition to the interest it will earn. Example: 1% for a $100,000 home equals $1,000.
- Loan payment
- The payment you make to your creditor on a loan. Also, the amount of your standard monthly payment.
- Loan type
- Home, auto, personal and home equity are all loan types. The two most common types of loans, home equity and personal, differ in fees, rates and tax deductibility of interest. Home equity loans often have higher fees, but usually have lower rates and a tax deduction for interest paid. Personal loans do not have a tax deduction for interest paid, and have a higher interest rate, but often have lower upfront fees. These are important considerations when choosing a loan.
- Low risk
- Low risk consumers have paid their bills on time, held their credit accounts for several years, and do not have large outstanding balances. In general, they have proven to lendersA person or company that offers to lend money to a borrower for a given period of time. that they are responsible, prudent users of credit. Low risk consumers are able to quickly obtain credit at the most favorable interest rates.
