Personal Loans

Loan contract

a contract that specifies the terms of a loan, as agreed to by the borrower and the lender

amortize

to repay the principal of a loan through a series of equal payments

maturity

the life or duration of the loan

collateral

assets of a borrower that back a secured loan in the event that the borrower defaults

unsecured loan

a loan that is not backed by collateral

annual percentage rate (APR)

a rate that measures the finance expenses (including interest and other costs) on a loan annually

add-on interest

a method of determining the monthly payment on a loan.

simple interest

interest on a loan computed as a percentage of the existing loan (or principal)

student loan

a loan provided to finance part of the expenses a student incurs while pursuing a degree

home equity loan

a loan where the equity in a home serves as collateral for the loan

equity of a home

the market value of a home minus the debt owed on the home

payday loan

a short-term loan provided in advance of a paycheck