Plain-English definitions for the most common consumer-lending terminology — the words you’ll see in disclosures, applications, and on this site.
A free U.S. phone service that connects callers with local nonprofit assistance programs for utilities, rent, medical, and other emergencies. Reached by dialing 211 from any phone. Often the first stop for borrowers considering high-APR loans.
The U.S. electronic payment network used for bank transfers. Standard ACH typically settles in 1-3 business days; same-day ACH (cutoffs around 1pm Eastern) settles within hours. Used for most loan funding and automatic repayments.
The cost of borrowing expressed as a yearly rate, including both interest and certain fees. Required to be disclosed by the Truth in Lending Act before you sign any loan. For short-term loans, APR can appear extraordinarily high because it annualizes a fee charged for a much shorter period.
A general term for loans available to borrowers with low credit scores (typically below 580) or limited credit history. May come from credit unions, non-bank installment lenders, or short-term lenders. Generally carries higher APRs than prime-credit loans.
A private nonprofit that rates businesses on responsiveness to consumer complaints, transparency, and length of operation. BBB accreditation requires meeting standards for honest advertising and complaint resolution.
An asset pledged by a borrower to secure a loan. If the borrower defaults, the lender can sell the collateral to recover the loan balance. Title loans use vehicles as collateral; pawn loans use physical items.
The federal agency established in 2011 to enforce consumer financial laws. Administers TILA, the Equal Credit Opportunity Act, and other consumer-protection statutes. Maintains a public complaint database at consumerfinance.gov.
A business model used in Texas (and historically a few other states) where a non-lender entity arranges loans through a third-party lender and charges a fee for the service. CheckCity.com operates as a CSO/CAB in Texas.
Monthly debt payments divided by gross monthly income, expressed as a percentage. Used by lenders to assess ability to repay. A DTI above 43% is typically considered high; short-term lenders often consider this informally rather than as a hard cap.
Failure to make required payments on a loan according to the agreement. Default consequences may include late fees, credit bureau reporting, collections activity, and (for secured loans) repossession of collateral.
A company that originates, underwrites, and funds loans with its own capital, rather than acting as a broker who matches borrowers with third-party lenders. Direct lenders typically provide a single point of contact for the entire loan lifecycle.
A non-loan product that lets workers access wages they've already earned but haven't been paid. Apps include Earnin, DailyPay, and PayActiv. Often free or low-cost; not a loan and not reported as credit.
The federal agency responsible for protecting consumers from deceptive business practices. Enforces rules against debt-collection abuses, false advertising, and lending fraud.
A three-digit number (300-850) representing a borrower's credit risk, calculated by Fair Isaac Corporation from credit-report data. Used by most U.S. lenders. Short-term lenders typically don't set a FICO minimum but may consider it in underwriting.
The total dollar amount the loan will cost over its full term, including interest, fees, and any other charges. Required to be disclosed under TILA. Often more useful than APR for comparing short-term loans.
An inquiry that appears on your credit report and may slightly lower your score temporarily. Used at funding by some lenders. Each hard pull typically remains visible on your credit report for two years.
A loan repaid in fixed equal monthly payments over a set term. Short-term installment loans from non-bank lenders typically range from $500-$5,000 over 3-18 months. Each payment reduces both principal and accrued interest.
A revolving credit account that allows the borrower to draw funds repeatedly up to a credit limit, repaying and re-borrowing as needed. Interest is charged only on the outstanding balance.
A company that takes a borrower's application and passes it to multiple lenders in its network, typically earning a commission on funded loans. Brokers may shop the application to multiple parties, sometimes generating multiple credit inquiries.
A nonprofit organization providing legal research, advocacy, and education on consumer protection. Frequently cited authority on state-by-state lending laws and consumer-finance regulation.
The independent federal agency that charters and supervises federal credit unions. Sets the rules governing Payday Alternative Loans (PALs) and other credit union products.
A one-time charge added at loan funding to cover the lender's cost of processing the application. Typically expressed as a percentage of the loan amount (1%-10%). In some loans, the origination fee is deducted from the proceeds rather than added to the balance.
A small-dollar loan offered by federal credit unions and capped at a 28% APR by NCUA regulation. Typically $200-$2,000 with terms of 1-12 months. Generally the lowest-cost emergency credit available.
A short-term, small-dollar loan repaid in a single payment on or around your next pay date. Typically $100-$1,000 in amount, 7-30 days in term, with APRs of 300%-900%+. Regulated state by state.
A fee charged for paying off a loan early. Most modern short-term lenders, including Check City, do not charge prepayment penalties; paying early reduces total interest. Always confirm in the loan agreement before signing.
Extending a payday loan past its original due date by paying a new fee to delay repayment of the principal. Rollovers can dramatically multiply the total cost of borrowing. Many states cap or prohibit them.
A loan backed by collateral (such as a vehicle title or savings account). Lower risk to lender, often resulting in larger loan amounts and lower APRs than unsecured loans, but the borrower's collateral is at risk in default.
An inquiry into your credit history that does not affect your credit score. Used at application by most short-term lenders to verify identity and check basic creditworthiness. Visible only to you, not to other lenders pulling your report.
A short-term loan secured by a vehicle title held by the lender as collateral. Loan amount is tied to the vehicle's appraised value. Borrowers retain use of the vehicle during the loan, but default may result in repossession and sale.
A federal law (15 U.S.C. §1601) that requires lenders to disclose the APR, total finance charge, total of payments, and payment schedule before a borrower signs. Administered by the CFPB. Compliance with TILA is a baseline standard for every legitimate U.S. lender.
The process by which a lender evaluates an application and decides whether to approve, deny, or counter-offer. For short-term loans, underwriting focuses on income verification, banking history, and ability to repay rather than a FICO threshold.
A loan not backed by collateral. Approval is based on the borrower's income, credit history, and ability to repay. Higher risk to lender often translates to higher APRs and lower maximum loan amounts.
CheckCityApply.com is an independent information and marketing resource and is not the official Check City website. Loan products are offered by Check City, a licensed direct lender based in Provo, Utah. Check City is licensed and regulated in each state where it operates. APRs vary by product and state but can range from approximately 350% to 912% for short-term loans. Short-term loans are intended for emergency financial needs only — not for long-term financial solutions. Please borrow responsibly and consider all available alternatives before applying.