ACH – This stands for Automatic Clearing House, which is mainly a method used to transfer funds to and from bank accounts.

Annual Percentage Rate (APR) – This is the cost of credit which is expressed in a yearly rate. Essentially, it’s how much interest you would be paying over the course of a year, which may not be applicable if your loan term is only over a few months.

Balance – This refers to the outstanding amount in your bank account, or could be in relation to the amount remaining on your loan.

Bankruptcy – This is a legal proceeding that takes place in Federal Court, which is entered into by a borrower. Someone who is bankrupt will generally be an individual who is not able to pay back their debts. They can instead negotiate some form of partial payment through selling their assets. Bankruptcy information can stay on the credit report of a person for up to a decade.

Budget – A budget is a plan or method that is used for spending management, or for saving money. Many households have a budget so that they can keep track of their spending.

Caps – A cap is the established limit of an interest rate. If your loan were to reach the interest cap, no further interest could be applied, regardless of late payments or defaults.

Cash Advance – This refers to a source of cash which can be borrowed in case of emergencies. A cash advance is for people who are employed but may not have access to other sources of credit. It is meant to bridge the financial gap before someone’s next pay day. The interest is charged from the date the money is advanced.

Charge Off – A charge off is a form of credit which is written off as being uncollectible from a borrower. Sometimes a charge off refers to a loan that has been sold or passed on to a collection agency. In these cases, the debt remains collectable.

Checking Account – Your checking account refers to a savings or bank account where you keep your money for safekeeping. This money can be withdrawn easily by simply writing out a check or using an ATM machine.

Collateral (Security) – Collateral will normally be an asset which is pledged in order to assure repayment of debt. This only applies to secured loans. For example, a mortgage is a secured loan, where the collateral is the property you’re purchasing. So if the mortgage were defaulted on, the lender may have the option of repossessing your home.

Compound Interest – Compound interest is interest that has been calculated from the loan’s balance. This balance will include all interest which is unpaid.

Co-Signer – A co-signer is an individual who chooses to sign a loan agreement along with the borrower and partly assumes responsibility for repayment of a loan.

Credit – Credit is money which you have borrowed on the understanding that it will be repaid at a later date. This could include a loan, credit card, or taking something out on finance.

Credit Request – As the name implies, a credit request is a credit inquiry given in writing, whether this is on paper or online. On occasion, a request fee will be charged in order to cover the cost of processing the loan.

Credit Bureau – A credit bureau is an organization that works to compile credit histories and also provides reports to creditors when requested. These reports are used by creditors to make loan decisions. Experian, TransUnion and Equifax are the largest credit reporting agencies in America.

Credit Card – A credit card is a card issued by a bank or other financial institution that allows the card holder to make payments for purchases on the card and make payments every month to cover the outstanding balance . The outstanding balance is subject to interest.

Credit Counseling – Credit counseling is a type of counseling which is provided by organizations in order to help consumers repair their credit. That way they can get their financial affairs back on track, and may be able to apply for credit in the future.

Credit Limit – A credit limit is the most amount of money which can be borrowed, in terms of a loan or credit card.

Credit Line – A credit line can also be referred to as a personal line of credit, and is the maximum amount a person can get against their account. Once the credit line has been repaid, the individual can then re-borrow against their account.

Credit Report – Your credit report, as the name suggests, is a report which outlines your history of debt repayment, outstanding debts, bankruptcies and late payments. It will also include any relevant bankruptcies.

Creditor – A creditor is a business or person from whom you are borrowing – essentially, a creditor is someone you owe money to.

Debit Card – A debit card is a card issued by a bank or other financial institution that is generally used for purchases. The purchase price is deducted directly from a checking account, therefore does not rely on credit.

Debt – Debt is the amount which is owed to a creditor, lender or lending partner. Your total debt amount will be how much you owe every creditor you’re borrowing from, and can include things like mortgages, car finance, and personal loans.

Debt Consolidation – Debt consolidation refers to a strategy which can be used by people to improve their debt management issues. Instead of opting to pay several bills every month, a consumer will combine all the debts into one loan and just pay one bill, making the payment to one financial institution.

Default – A default can occur should an individual fail to pay back a loan or meet the terms of the loan agreement. Generally, a Default Notice will be issued after a few months of non-payment.

Delinquency – If a loan is said to be in a delinquent status, this means that the borrower has failed to pay on time.

Direct Deposit – A direct deposit is an electronic funds transfer, sent directly to a bank account, so a paper check is not needed.

Equal Credit Opportunity Act – This Act is a federal law which prohibits lenders a from any sort of applicant discrimination.

E-Signature – Often referred to as an electronic signature, an e-signature uses software to bind your signature or some other mark to a document. The E-Sign bill was passed by the government in June 2000, which legalizes this form of signature.

Fair Credit Reporting Act – This is a federal law which gives borrowers the right to learn exactly what information credit reporting agencies currently have on them. The Act also enables people to dispute incorrect data.

Federal Deposit Insurance Corporation (FDIC) – Organizations that are part of the FDIC, often federal agencies, insure a consumer’s deposit in their savings and for a loan of up to $100,000 for every account. These deposits will include savings and checking accounts, as well as deposit certificates.

Finance Charge – A finance charge is a credit cost expressed in a dollar amount.

Fixed Interest Rate – A fixed interest rate is precisely what it sounds like – it’s a rate of interest which will not change through the term of the loan.

Foreclosure – Foreclosure is a legal process in which collateral that has been secured against a loan can be sold in order to repay the loan if the borrower defaults.

Installment Loan – An installment loan is a type of loan that has a predetermined number of payments and loan duration. For instance, you could repay an installment loan over 12 monthly installments, thus the credit would be borrowed over the course of a year.

Interest – Interest is essentially a fee that a lender charges for borrowing a sum of money. The interest rate can be either fixed or variable.

Interest Rate – The interest rate is the rate at which a lender will charge borrowers for borrowing money from them. It is typically expressed in percentage (%) per annum.

Judgment – A judgment in this context is a court order in relation to a lawsuit. The judgment decides who wins the case.

Late Payment Fee – A late payment fee is a charge that can be applied when a payment is not received by the due date.

Lease – A lease is a legal contract which allows a consumer to use a particular asset, like a car or property, for payment. The asset will need to be returned once the lease term ends.

Lender – A lender is a business or an individual who lends or offers loans to people.

Liable – If you are liable for something, this means that you have legal responsibility for it. For example, when you sign a loan agreement, you are liable for the outstanding debt.

Lien – Lien is when a creditor lays claim to a piece of property, in order to ensure that a debt is paid off.

Loan – A loan is any amount which is borrowed and then repaid later, alongside added interest.

Loan Agreement – A loan agreement is a legal contract which details the conditions and the terms of the loan.

Mortgage Loan – As the name implies, a mortgage loan can only be used to purchase a piece of real estate. With these types of loan, the property acts as security for the loan.

Public Record – Any information which can be obtained from federal, state or other sources can be considered a matter of public record. Such information will often detail a person’s history of financial obligations, which includes child support and alimony.

Refinance – When you refinance a loan, this means that you pay off an existing loan with whatever a new loan, which can often come with a lower interest rate.

Repossess – Repossession is the voluntary or forced surrender of items, should a consumer fail to pay back a loan. This only applies to secured loans.

Right of Rescission – A right of rescission is the right of a borrower to cancel the contract within three working days of taking out the loan.

Savings Account – Money is typically kept in a savings account for safekeeping. Savings accounts should also help you earn interest on any money kept in this account.

Secured Loan – A secured loan is a form of loan where the borrower will pledge their assets, such as a car or home, against the value of the loan. These assets could be repossessed if the individual is not able to pay back the loan.

Simple Interest – Simple interest is where interest is calculated based on the principal amount borrowed, rather than the current outstanding balance.

Title – A title is a document which proves ownership of particular property, such as a home or vehicle.

Truth in Lending Act – This is a federal law which generally requires lenders to disclose to their borrowers the actual cost of the loan. This will include the actual interest rate as well as the terms and conditions of the loan. The information will also need to be provided in a way that is easy to understand.

Unsecured Loan – An unsecured loan is a type of loan that does not require any collateral. This means that there is more risk involved for the lender, and these sorts of loans can therefore come with higher interest rates.

Variable Interest Rate – Loans with a variable interest rate will have rates that can change based on the current index, like a prime rate.

Yield – Yield refers to the rate of return which is paid on money market accounts, bonds or savings.