Achieve Personal Loans Glossary A–Z

Terms are listed alphabetically with a short definition each; use the letter links to jump, or link to any term through its own anchor.

• A
• B
• C
• D
• E
• F
• G
• H
• I
• L
• O
• P
• R
• S
• T
• U
• V

A

Adverse action notice

A written notice a lender must send when it declines a credit application or offers worse terms than requested. It names the main reasons and the credit bureau used, and tells you how to get a free copy of your report. Read it before you reapply, because it shows what to fix.

Amortization

The way a fixed-rate installment loan is paid down over time. Early payments go mostly to interest; later payments go mostly to principal. An amortization schedule lists every payment, as our calculator does.

Annual percentage rate (APR)

The yearly cost of borrowing, including interest and most fees, expressed as a percentage. It is the best single number for comparing personal loan offers. Our examples use a 24.99% APR.

Autopay

Automatic payments drafted from your checking account on the due date. Some personal loan lenders give a small rate discount for autopay. Time it for the day after you are paid to avoid overdrafts.

B

Balance transfer

Moving a credit card balance to another card, often at a 0% promotional rate for a set period, usually with a 3% to 5% fee. It competes with a debt consolidation loan; the better choice depends on whether you can repay before the promotion ends.

Biweekly payment

Paying half the monthly amount every two weeks. That adds up to 26 half-payments, or about 13 full payments a year, which shortens the loan if the lender applies the extra to principal.

C

Charge-off

An accounting step a lender takes when it decides a debt is unlikely to be repaid, usually after about 180 days of missed payments. The debt is still owed, often to a collection agency, and the charge-off stays on a credit report for up to seven years.

Co-borrower

A second person who applies with you and shares equal responsibility for the loan and equal access to the funds. A co-borrower with stronger credit can improve approval odds or the APR.

Co-signer

A person who promises to repay the loan if you do not, without receiving the funds. Missed payments hurt the co-signer's credit too. Not all personal loan lenders accept co-signers.

Collateral

An asset pledged to secure a loan, such as a vehicle or savings account. If you default, the lender can take the collateral. Most personal loans are unsecured and require none.

Credit bureau

A company that collects credit history and sells credit reports. The three national bureaus are Equifax, Experian and TransUnion. Lenders may report to one, two or all three.

Credit report

A record of your credit accounts, balances, payment history, inquiries and certain public records. You can get free reports from each bureau. Check them for errors before applying for a loan.

Credit score

A three-digit number, commonly 300 to 850, that summarizes credit risk based on your report. Payment history and credit utilization weigh most. Higher scores usually earn lower APRs.

Credit utilization

The share of your available revolving credit that you are using. Keeping it under about 30% helps scores. Consolidating card balances into an installment loan can lower it.

D

Debt consolidation

Combining several debts into one new loan with a single payment, ideally at a lower APR. It works best when you stop adding new balances to the old accounts.

Debt-to-income ratio (DTI)

Monthly debt payments divided by gross monthly income. Many personal loan lenders prefer a DTI under about 36% to 40% including the new payment.

Default

Failing to repay a loan as agreed, typically after several missed payments. Default can lead to collections, a charge-off, legal action and serious credit damage. Call the lender early if you expect to miss a payment.

Direct pay

A feature where the lender sends consolidation funds straight to your creditors instead of to you. It ensures the old balances are paid and sometimes earns a slightly lower rate.

Disclosure

The document a lender must give before you sign, showing the APR, finance charge, amount financed, total of payments and payment schedule. Compare disclosures, not ads, whether the offer comes from our network or Achieve Personal Loans.

Due date

The day each payment must reach the lender. Many personal loan lenders let you change it once or twice to match a new pay schedule.

E

Early payoff

Paying a loan in full before the end of its term. It saves remaining interest. Ask for a payoff quote and confirm the personal loan has no prepayment penalty.

F

Finance charge

The total dollar cost of credit, including interest and certain fees, over the life of the loan. On our representative $2,000 example it is $418.73.

Fixed rate

An interest rate that stays the same for the whole loan, so the payment never changes. Almost all personal loans have fixed rates.

G

Grace period

A short window after the due date before a late fee applies, often 10 to 15 days on a personal loan. It does not stop interest from accruing.

H

Hard inquiry

A credit check made when you apply for credit, recorded on your report. It may lower a score by a few points for a short time. Several loan inquiries in a short window are often scored as one.

I

Installment loan

A loan repaid in equal scheduled payments over a set term, such as a personal loan or auto loan. A personal loan is the most common unsecured installment loan. Once paid off, the account closes.

Interest rate

The percentage charged on the principal, not counting fees. Compare APR instead, because it includes fees too.

L

Late fee

A charge for a payment made after the due date and grace period, often $15 to $40 or a percentage of the payment. Autopay avoids most late fees.

Lender network

A service, like ours, that shares one loan request with several lenders that may make offers. The network does not lend money or make credit decisions, and ours is not affiliated with Achieve Personal Loans.

Line of credit

A revolving limit you can draw from, repay and draw again, usually at a variable rate. It suits uneven costs; a personal loan suits a single known cost.

Loan term

The length of time to repay a loan, usually 6 to 60 months for personal loans. Longer terms lower the payment but raise total interest.

O

Origination fee

A one-time fee to process a loan, often 1% to 10% of the amount and frequently deducted from the funds you receive. The APR includes it. Ask Achieve Personal Loans or any lender whether the fee is deducted.

P

Payoff amount

The exact amount needed to close a loan on a given day, including interest accrued since the last payment. It differs from the balance shown on a statement.

Prepayment penalty

A fee for paying a loan off early. It is uncommon on personal loans but worth confirming before you sign.

Prequalification

A preliminary review, usually with a soft credit check, that shows whether you are likely to qualify and at roughly what rate. It is not a final approval. Prequalifying with Achieve Personal Loans and with our network in the same week lets you compare without affecting your score.

Principal

The amount borrowed on a personal loan, not counting interest or fees. Each payment reduces principal by the amount left after interest.

R

Refinancing

Replacing an existing loan with a new one, ideally at a lower APR or with a better term. Watch for new origination fees that can erase the savings; compare a refinance quote from Achieve Personal Loans or our network on total cost.

Representative example

A sample loan used to show typical costs. Ours: $2,000 over 18 months at 24.99% APR, $134.37 a month, $2,418.73 total.

Returned payment fee

A charge when a payment bounces because of insufficient funds, often $15 to $30, on top of any bank fee. Keep a buffer in the account used for autopay.

Revolving credit

Credit you can reuse up to a limit, such as a credit card or line of credit. Balances and payments vary month to month.

S

Secured loan

A loan backed by collateral. It can be easier to qualify for or carry a lower APR, but you risk losing the asset if you default.

Soft inquiry

A credit check that does not affect your score, used for prequalification, account reviews and checking your own credit.

T

Thin credit file

A credit report with few accounts or a short history, which makes scoring harder. Lenders may look at income and bank activity instead.

Total of payments

The sum of every scheduled payment, equal to principal plus finance charge. It is the real price of the loan.

Truth in Lending Act (TILA)

The federal law that requires lenders to disclose the APR, finance charge and other key terms before you sign, so offers can be compared on the same basis.

U

Underwriting

The lender's review of your personal loan application, credit, income and debts to decide whether to lend and on what terms.

Unsecured loan

A loan with no collateral, approved on credit and income. Most personal loans are unsecured.

V

Variable rate

An interest rate that can change with a market benchmark, so payments can rise or fall. More common on lines of credit and cards than personal loans.

Verification

Steps a lender takes to confirm identity, income and bank details, often by asking for documents or connecting to your bank with permission.