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Annual Percentage Rate    (APR)

The interest rate for a whole year expressed as an annual percentage.

Effective APR

Is the fee plus compound interest for a year.  So the rate can vary depending on the up front fee.  This is the "cost of borrowing" as defined in the Truth in Lending Act. 


An estimate of your income and expenses for a period of time.


The ability to obtain goods or services before payment based on the trust that payment will be made in the future.

Credit Limit 

The maximum amount of money a borrower will be allowed by the creditor for a loan.

Credit Report

A confidential report on a consumer's payment behavior as reported by creditors to the credit reporting agency.  

Credit Reporting Agency

Is a company that collects information about an individual's creditworthiness.

Debit Card

A card issued by a bank allowing the holder to transfer or access money electronically at point of purchase or automated teller machine.


The amount owed to a person or organization for funds borrowed.


When a scheduled payment does not arrive by the due date.

Equal Credit Opportunity Act    (ECOA)

Federal law that requires lenders to make credit equally available without discrimination based on Race, Color, National Origin, Age, Gender, Marital Status or receipt of income from public assistance programs.

Fair Credit Reporting Act (FCRA)

Federal Law which establishes specific permissible purposes for which a credit report may be requested.  It places time limits on how long adverse information may impact your credit history.  It also enables consumers access to the information Credit Reporting Agencies have on file about them and dispute inaccurate data in the record.  

Installment Loan

A loan repaid with interest in equal periodic payments.


The fee charged by a lender to a borrower for the use of borrowed money usually expressed as an annual percentage rate (APR)

Permissible Purpose

Legally defined in section 604 of the Fair Credit Reporting Act for a credit report to be issued with a 3rd party. Permissible purposes include credit transactions and government financial responsibility laws.


The amount borrowed.

Truth in Lending (TIL)

Federal law designed to protect consumers in their dealings with lenders.  The following information must be disclosed to the borrower before signing the loan agreement.  Annual percentage rate (APR), term of the loan and total cost.


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