Payday Loans Glossary – Direct Lending Terms

Are you confused about how a payday loan works or what the terminology is with many payday lending phrases or terms? Don’t worry, we can help you better understand all your short term financing questions. There are many direct payday lenders willing to offer you cash. But it doesn’t help if you can’t understand how the loan works! There are so many online lending terms that it’s confusing for most applicants. Use our glossary to better understand the most important online loan terms. In addition to online lending, we cover related areas of the personal lending industry. Use this directory to find explanations for the most common industry terms.

Common Payday Loan Lending Terms

Installment Loan – This type of personal loan is usually repaid over a set period with a specific number of scheduled payments. Most installment loans are issued for more than payday loans. Direct installment loans have become more popular over the past few years. We can attribute this to states cracking down on unscrupulous online companies.

Tribal Loans – Tribal loans are often offered by Sovereign Indian Tribes throughout the United States. These types of loans are typically presented as alternative lending options for consumers who may not qualify for traditional loans. View an updated list of tribal loan companies.

Cash Advance – A cash advance can mean different things. It’s a service offered by credit card companies that allows consumers to withdraw money from their credit cards. A cash advance is also another name for a direct-lender payday loan.

Guaranteed loans – While no lender will give you a loan that’s completely guaranteed, some companies offer loans that come with some type of guarantee that you will be approved for specific amounts. These loan amounts could be low, but there’s still a chance you can get a payday loan with unemployment benefits or other issues that most personal loan providers would not be on board with.

Direct Payday Lender – We use this term a lot throughout our site. A direct payday lender is a company that actually offers short-term financing. This is not a middleman or lender matching service. They’re the company that’s actually funding your cash advance or personal loan.

Car Title Loans – A quick way for consumers who own a car, boat, or motorcycle to get cash with a secured loan. A vehicle title loan is different from a cash advance or other traditional unsecured loans. With this option, you’re using a vehicle as collateral to secure financing. A car title loan will typically have a high interest rate.

Credit Report – A detailed report that shows a consumer’s credit history. A credit report is often used to determine a borrower’s creditworthiness. Often, when they’re applying for installment loans or traditional bank loans. Most lenders do not pull a consumer’s credit to check a credit score. Instead, they rely on other tools, such as ChexSystems or Teletrack, to determine a borrower’s creditworthiness. Having Good credit will often lead to more favorable lending terms from a bank or credit union and you won’t have to turn to a No Teletrack payday lender.

Merchant Cash Advance – This type of loan is for businesses and does not apply to individual consumers. Most legitimate cash advance businesses receive a one-time payment from a lender in exchange for a future percentage of sales. Much like money from direct payday lenders, a fast cash advance will come with a high interest rate. We see most merchant cash advances now set up as a lump-sum payment to a business in exchange for certain future revenues. The FTC has recently launched separate investigations into small business financing that cover this form of lending.

Payday Loan Late Fees – These are fees that lenders charge consumers. They arise when the borrower doesn’t pay the loan amount, causing it to become past due. Some online lenders offer a grace period of a few days, but it depends on the lender. It’s important to pay back your online payday loan on time. Because a lender can start charging late fees once a payday loan comes due.

Payday Loans Glossary – Lending Terms and Definitions