Navigating the world of personal lending can sometimes feel like decoding a foreign language. But worry not! We're here to break down those pesky financial terms in plain English. And remember, if you're ever in doubt or need a more personalized explanation, our team, backed by advanced AI, is always here by your side to offer that human touch. Let's dive into our simplified jargon buster for all things related to personal lending:
- APR (Annual Percentage Rate): This is the yearly cost of your loan, which includes the interest rate plus any fees.
- Credit Score: Think of this as your financial report card. It’s a score between 0 and 1000 that lenders use to gauge how likely you are to repay a loan. Higher scores are better, with 600+ being a good benchmark.
- Secured Loan: This type of loan is backed by an asset, like your car. It's a bit like a safety net for the lender.
- Unsecured Loan: Here, you don’t need to use an asset as security. Approval is based on your creditworthiness and affordability.
- Principal: This is the original amount you borrow, not including the interest.
- Interest: Simply put, it's the cost you pay for the privilege of borrowing money.
- Fixed Interest Rate: A rate that stays the same throughout the loan term. It's like a steady financial journey.
- Variable Interest Rate: A rate that can change, meaning your repayment amounts might go up or down.
- Term: The amount of time you have to pay back the loan.
- Repayment Schedule: This is your repayment roadmap, detailing when and how much you need to pay back.
- Default: This is what happens if you don’t meet the loan's repayment terms. It’s a situation best avoided.
- Credit History: A record of your borrowing and repayments. It’s like your financial story.
- Guarantor: Someone who agrees to pay back the loan if you can’t.
- Early Repayment Fee: A charge you might face if you pay off your loan ahead of schedule.
- Debt Consolidation: Rolling multiple debts into a single, more manageable loan.
- Total Cost of Credit: The full amount you end up paying back, including interest and fees.
- P2P Lending (Peer-to-Peer): Borrowing money directly from people online, bypassing traditional banks.
- Credit Contract: Your loan’s rulebook. It’s a legal document outlining your loan's terms and conditions.
- Late Payment Fee: A fee for missing a loan repayment deadline.
- Credit Facility: An agreed maximum amount you can borrow.
- Broker: Think of them as financial matchmakers. They help you find the best loan deals by connecting you with various lenders.
- Lender: The entity that gives you the money, like a bank or financial institution.
- Digital Platform: An online tool or website where you can manage your finances and interact with financial services.
- Digital Advice: Like a financial guru in your pocket, helping you make smart money decisions via digital tools or apps.
At Lenny, we blend the best of both worlds – the efficiency and intelligence of advanced AI with the understanding and care of human interaction. Whether you're exploring our digital platform for advice or speaking directly with our experts, we ensure your journey through the world of finance is as informative as it is reassuring. Remember, we’re more than just a service; we’re your financial partner, here to guide you every step of the way. Lenny offers personal loans from $3,000 to $80,000
This blog is provided for general information purposes and is not a recommendation you enter or exit any particular loans or insurance policy. Information on the website does not consider your personal circumstances, including your objectives, financial situation or needs.