Payday Loan Glossary

Amoritize

To pay off in regular payments over a loan term.

Credit Limit

The maximum amount that you are allowed to borrow at any one time

Default

Failure to meet a financial obligation. Depreciation: The value an asset loses due to wear and tear or time.

Garnishment

This is a legal attachment of wages made by a creditor, which ensures that, after taxes, the lender is paid a certain amount before the employee receives their pay.

Gross Income

The amount of income that is made before taxes or deductions that are taken out of the pay.

Lien

A notice attached to property that tells anyone interested that you owe a creditor a sum of money and that the property cannot be sold without first satisfying that creditor's debt.

Principal

The total amount that is borrowed from a lender, not including interest or fees.

Security Interest

This is the creditor's right to take property that is offered as security against a loan - i.e. a car or a house.

Truth in Lending Act

A federal law requiring a disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.