Payday loans have come under a lot of criticism in the United States and in many countries because of their predatory lending practices and other shady acts that are detrimental to people who are in the low income group and can only rely on payday loans for their credit needs. Here is a compilation of glossary of terms related to payday loans which may help you in understanding the terminology in a better manner and avoid getting trapped in a debt cycle or personal debt.

• Annual percentage rate (APR): This rate corresponds to the yearly cost of credit charged on a loan. The Federal Truth in Lending Act necessitates payday lenders to reveal the APR to potential borrowers.
• Bad credit: Bad credit can also be referred to as a low FICO score or a bad credit rating. This typically results from a borrower’s behind schedule payments, non-payment and other credit destructive dealings. It’s hard to acquire loans with bad credit.
• Bankruptcy: This can be defined as a federal court proceeding in which debts are wiped out (Chapter 7) or restructured for the reason of repaying them (Chapter 11).
• Cash advance loan: This can be defined as a short-term loan which is usually somewhere around a hundred to a thousand Dollars. It links the space until the subsequent payday.
• Collateral: Collateral can be defined as assets such as a vehicle or residence that are given as a security to a creditor as a reassurance of debt settlement. They typically have a comparable value as the debt itself.  If the borrower does not pay back, the lender can sell off the property to satisfy the debt.
• Community Financial Services Association of America (CFSA): This national organization guarantees that the payday loan industry function in a conscientious way. It gives some comfort to borrowers that they can acquire genuine short-term loans.
• Credit check: A credit check can be loosely defined as detailed credit reports from one or more than a number of the three principal credit bureaus (Experian, TransUnion, and Equifax). It encloses data on the broad creditworthiness of the probable borrower.
• Credit history: Credit history is a report that comprises of information on a borrower’s loan repayment activities, accessible credit lines and performance as far as credit is concerned.
• Credit report: A credit report is a review of a borrower’s credit record which comprises of outstanding debts, obtainable credit, credit inquiries, and public records for example court judgments or bankruptcy filings.

If you have any other points or terms related to payday loans please feel free to leave a comment.