Definitions and Resources
LendNation Financial Terms Glossary
We are clearly defining complex terms in a way that makes them easy for our customers to understand. Click on a term in this financial terms glossary to learn more.
Account
An account is a financial arrangement with a bank or other financial institution that allows individuals or businesses to deposit, withdraw, and manage their money. Common types of accounts include savings accounts, checking accounts, and investment accounts.
ACH
ACH stands for Automated Clearing House, a network used for electronically moving money between bank accounts across the United States. It is commonly used for direct deposit payments, bill payments, and other electronic transactions.
Advance Payment
This is a payment made ahead of its normal schedule, such as paying for a good or service before you actually receive it. It’s like putting down a deposit or pre-paying for something.
Amortization Schedule
A detailed table that outlines the repayment plan for an amortizing loan, showing each payment’s breakdown of principal and interest over time.
Annual Percentage Rate (APR)
The Annual Percentage Rate (APR) is the cost you pay each year to borrow money. The APR includes interest and fees and is expressed as a percentage.
Annuity
An annuity is a financial product, often used for retirement savings, that pays out a fixed stream of payments to an individual over time. It’s like buying a plan that gives you regular payments in the future, usually after retirement.
Appreciation
Appreciation refers to the increase in the value of an asset over time. It’s when something you own, like a house or stock, becomes more valuable than when you first bought it.
Asset
An asset is anything of value or a resource of value that can be converted into cash. Assets include things like cash, real estate, stocks, or personal property.
Automatic Bill Payment
This is a method of paying bills automatically through a bank account or credit card, typically on a set schedule. It’s a convenient way to ensure bills are paid on time without having to manually process each payment.
Bad Credit Loans
A bad credit loan is a loan designed for individuals with low or poor credit scores who may not qualify for traditional bank financing. These direct lender loans include payday loans, personal installment loans, title loans, or lines of credit that offer quick access to money with flexible requirements.
Balance Transfer
The process of moving an existing debt from one credit card or loan to another, often to take advantage of lower interest rates or better terms.
Bank Statement
A bank statement is a summary of financial transactions that occurred over a period of time on a bank account. It shows all deposits, withdrawals, and other activity in your account during a specific period, like a month.
Banking
Banking is the business of providing financial services, such as deposits, loans, investments and payments, to individuals, businesses and other organizations. Banking involves accepting deposits from customers, granting credit in exchange for those deposits and using those funds to make loans or investments. Banks use the money they receive from customers to generate income by investing it in various assets, such as stocks or bonds.
Base Pay
Base pay is the initial rate of compensation an employee receives, not including extra bonuses, overtime, or other additional payments. It’s the core salary or wage before any additional perks are added.
Beneficiary
A beneficiary is a person or entity designated to receive benefits from a financial arrangement or instrument, like a will, trust, insurance policy, or retirement account, after the death of the owner or policyholder.
Bonds
Bonds are a type of investment where you lend money to an entity (like a government or corporation) in exchange for periodic interest payments plus the return of the bond’s face value at its maturity date. It’s essentially a loan you give out that’s supposed to be paid back with interest.
Borrower
An individual or entity that receives funds from a lender with the agreement to repay the borrowed amount, typically with interest.
Budgeting
Budgeting is the process of creating a plan to spend your money. It involves setting financial goals, tracking income and expenses, and planning how to allocate funds to meet various needs and goals.
Budgeting Apps
Budgeting apps are tools on your phone or computer that help you track spending, plan bills, and set savings goals. Many can connect to bank accounts and send helpful alerts, and a simple spreadsheet is a good alternative if you prefer not to link accounts.
Buy Now Pay Later
Buy now, pay later (BNPL) is a payment option that lets you split a purchase into smaller payments over time. You make a down payment—usually at checkout—and pay the rest through scheduled installments. Some plans may charge interest or fees, especially for late or missed payments.
Buydown
An arrangement where a borrower makes additional payments that exceed their required loan repayment, specifically allocating the extra funds towards the principal balance of the loan.
529 College Savings Plan
A tax-advantaged investment plan operated by a state or educational institution designed to help families save for future college costs.
Cash Advance
A cash advance is a short-term loan that provides instant funds, typically borrowed against a future paycheck or a credit line, offering a quick financial solution during emergencies.
Cash Back
Cash back refers to a perk offered by some credit and debit cards, where a percentage of the amount spent is returned to the cardholder. It’s like getting a discount on purchases, where the savings are given back to you as cash or credit on your account.
Check Cashing
Check cashing is a service that converts checks into cash without the need for a personal bank account. It’s a quick way to access money from payroll, government, or personal checks when you need funds immediately.
Checking Account
A checking account is a bank account that allows for easy access to your funds for daily transactions, such as deposits, withdrawals, and payments. It’s the go-to account for managing your day-to-day money flow.
Collateral
An asset or property that a borrower pledges as security for a loan. If the borrower defaults, the lender can seize and sell the collateral to recover the loan amount.
Commodity
Commodities are basic goods used in commerce that are interchangeable with other goods of the same type, including agricultural products, minerals, and energy resources.
Cosigner
A cosigner is someone who agrees to pay off a loan if the main person borrowing the money can’t make the payments. This helps a lot when you’re trying to get a loan but might not have the best credit history or enough income by yourself. This can make it easier for you to get approved for a loan, especially if it’s your first time borrowing money or you need a bigger loan.
Cost of Living
Cost of living refers to the amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a certain place and time. It’s a measure of how expensive it is to maintain a certain lifestyle.
Credit Building
The process of improving your credit score through responsible credit practices, such as timely payments and maintaining low balances on credit cards.
Credit Bureaus
Organizations that gather and keep individual credit information, which they provide to lenders, employers, and other entities to help them make decisions regarding lending money, granting credit, or offering employment.
Credit Obligation
A legally binding agreement where a borrower agrees to repay a lender as per the terms specified in the contract. This can include payments on loans, credit cards, and other forms of borrowed money.
Credit Report
A credit report is a summary of your financial behavior and history. It includes information about your credit accounts, payment history, balances, and any recent loan applications. It’s created and maintained by the three major credit reporting agencies: Equifax, Experian, and TransUnion.
Credit Score
A credit score is a numerical expression based on a statistical analysis of an individual’s credit information, which is used to represent the creditworthiness of that individual.
Credit Utilization
The percentage of a borrower’s available credit limit that is currently being used. It is an important factor in calculating credit scores.
Debit Card
A debit card is a payment card that deducts money directly from a consumer’s checking account to pay for a purchase, eliminating the need to carry cash or physical checks.
Debt
Debt refers to money borrowed by one party from another under the condition that it is to be paid back at a later date, typically with interest. It can range from loans and credit cards to any form of owed money.
Debt Consolidation
Combining multiple debts into a single loan or payment to simplify financial management and potentially reduce interest costs.
Debt-to-Available-Credit Ratio
The percentage of your total available credit that you are using at any given time. It is calculated by dividing your total outstanding debt by your total available credit limits.
Debt-to-Income Ratio
The Debt to Income Ratio (DTI) measures the percentage of a person’s gross income that goes towards paying debts. It is a key indicator used by lenders to assess an individual’s ability to manage monthly payments and repay debts.
Deductible
A deductible is the amount paid out of pocket by the policyholder before an insurance provider will cover any expenses.
Default
Failure by a borrower to meet the agreed-upon terms of a loan, such as missing payments or not repaying the loan at all.
Dependent
A dependent is a person who relies on another, typically a family member, for financial support.
Depreciation
Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life.
Direct Deposit
Direct deposit is an electronic payment method that deposits funds directly into a recipient’s bank account.
Direct Lender
A direct lender is a financial institution or company that provides loans directly to borrowers, without using brokers or referral services. These can include direct lender payday loans, direct lender installment loans, and other direct lender no credit check options.
Disclosures
In the context of financial services, disclosures refer to the mandatory information that lenders must provide to borrowers. This information typically includes interest rates, fees, repayment terms, and other critical details about a loan product.
Discretionary Income
Discretionary income is the money you have left after paying taxes and essential expenses. Essentials include housing, utilities, food, transportation, insurance, and minimum debt payments. This is different from disposable income, which is the amount left after taxes but before subtracting your basic expenses.
Earned Income
Earned income is the money derived from paid work, including wages, salaries, bonuses, and other employment compensation.
Economic Conditions
Economic conditions refer to the state of a country’s economic system and its current phase of the business cycle.
Emergency Fund
An emergency fund is a financial safety net designed to cover unexpected expenses or financial emergencies. This reserve of money helps protect individuals from incurring debt when faced with unforeseen circumstances like medical bills, car repairs, or job loss.
Emergency Loans
An emergency loan is a fast, short-term loan designed to cover unexpected or urgent expenses. These loans may come in the form of payday loans, installment loans, or unsecured personal loans and are often available the same day you apply.
Equity
The value of an asset, such as a property or investment, minus any outstanding debts or liabilities.
Escrow
A separate account where funds are held by a third party, typically to cover property-related expenses such as taxes and insurance.
FICO Range
The range of possible values for a FICO credit score, typically between 300 and 850, with higher scores indicating better creditworthiness.
FICO Score
A credit score based on an individual’s credit history, used by lenders to assess the borrower’s creditworthiness.
Financial Goals
These are targets you set for how you want to use your money. These can be big or small, short-term or long-term. They help you make smarter choices, stay on track, and feel more confident about your finances.
Financial Hardship
Financial hardship is when your income or expenses make it difficult to pay for basic needs like housing, utilities, food, transportation, or debt payments. It is a period when money is tight, and you must make tough choices about which bills to pay first.
Financial Literacy
This means having the knowledge to understand money topics like saving, budgeting, credit, and loans, and using that knowledge to make smart financial decisions.
Financial Planning
The process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve monetary goals.
Flexible Loans
A type of loan that offers borrowers flexibility in terms of payment options, repayment amounts, and access to borrowed funds, so you can manage borrowing costs according to personal financial situations.
Foreclosure
Foreclosure happens when a person can’t keep up with their mortgage payments, and the bank or lender takes back the home to sell it and recover the money owed.
Gig Economy
The gig economy means earning money from short-term or on-demand work, like driving for a rideshare company, making deliveries, freelancing online, or taking seasonal or task-based jobs. Instead of one steady paycheck, gig workers often get paid by the job or per project. That can make planning and budgeting extra important.
Grace Periods
A specified period after the due date during which a borrower can make a late payment without incurring penalties.
Gross Income
The total amount of money earned by an individual or a business before any deductions or taxes are subtracted.
Hard Inquiries
A credit check made by a lender or financial institution when a borrower applies for a loan, potentially affecting the borrower’s credit score.
Health Savings Account
A Health Savings Account (HSA) is a tax-advantaged account created to help individuals save for medical expenses that high-deductible health plans don’t cover.
HELOC (Home Equity Line of Credit)
A revolving line of credit secured by the equity in a borrower’s home, allowing them to borrow funds as needed.
Homeowners Insurance
Homeowners insurance is a form of property insurance that covers losses and damages to an individual’s house and assets in the home.
Household Expenses
Household expenses are non-discretionary expenses necessary for the maintenance of the home and daily living.
Household Income
Household income is the combined gross income of all members of a household, typically used to understand the household’s economic standing.
Identity theft
Identity theft is the deliberate use of someone else’s identity, typically as a method to gain a financial advantage or obtain credit and other benefits.
Income Verification
Income verification is how a lender confirms what you earn before offering a loan. Common proof includes recent pay stubs, W-2s, bank statements, 1099s, or benefit letters, and the exact documents can vary by loan and by state.
Individual Taxpayer Identification Number (ITIN)
A tax processing number issued by the IRS to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN).
Inflation
Inflation is the rate at which the general level of prices for goods and services is rising, subsequently eroding purchasing power.
Installment Loan
A loan with a fixed number of regular payments (installments) covering both principal and interest over a predetermined period.
Instant Cash
Money obtained quickly and with minimal processing time, often used to meet urgent financial needs.
Instant Debit Card Funding
Instant debit card funding is available when you choose to pre-authorize the repayment of your installment, title, line of credit, or payday loan with the same debit card used to fund it.
Internal Revenue Service
The Internal Revenue Service (IRS) is the U.S. government agency responsible for tax collection and tax law enforcement.
Job Market
The job market is the market in which employers search for employees and employees search for jobs. It refers to the unemployment rate, available positions, and wages offered.
Joint Accounts
A Joint Account is an account held by two or more individuals who share responsibility for its management and any associated debts or liabilities.
Kiosk Banking
A banking service that allows customers to perform basic financial transactions, such as deposits and withdrawals, at self-service kiosks.
Lender
The entity or individual that provides funds to a borrower with the expectation of repayment, typically with interest.
Lien
A lien is a legal right granted by the owner of property, by a law or otherwise acquired by a creditor. A lien serves to guarantee an underlying obligation, such as the repayment of a loan.
Line of Credit
A line of credit is a more flexible type of loan compared to an Installment Loan or Payday Loan, and you can use it whenever you need extra cash. You can borrow up to a set amount, your credit limit, and pay it back over time or right away, and then borrow again up to the same limit.
Liquid Assets
Liquid assets are assets that can be quickly and easily converted into cash without significant loss of value.
Loan Application
A loan application is a process by which a potential borrower applies for a new loan, and a lender processes that application.
Loan Term
The loan term is the duration of time from when the loan is given to when it is completely paid off.
Loan-to-Value Ratio
A financial ratio that compares the amount of a loan to the appraised value of the asset being financed, often used in real estate lending.
Long-Term Lenders
Long term lenders are lenders that offer loans with longer repayment periods, often several months or years. These loans give borrowers more time to pay back the money they borrow in smaller, more manageable payments.
Minimum Payment
The minimum payment is the lowest amount of money that one is required to pay on a credit card statement each month.
Money Order
A money order is a prepaid piece of paper, similar to a check, used for making payments.
Negative Amortization
A situation in which a borrower’s payments do not cover the interest due, causing the loan balance to increase.
Net Income
Net income is the amount of actual earnings remaining after all deductions, including taxes and social security contributions, have been subtracted from an individual’s gross income.
Net Worth
The difference between an individual’s or entity’s total assets and total liabilities, representing their overall financial value.
Online Loan
A type of loan that is applied for, processed, and disbursed over the internet, allowing for fast processing and convenience without the need for visiting a bank or loan office.
Online Shopping
Online shopping is when you buy things over the internet using your phone, tablet, or computer instead of going to a store.
Origination Fee
A fee charged by a lender to cover the costs associated with processing a loan application.
Overdraft
A situation in which a bank account’s balance goes below zero, allowing the account holder to make transactions but incurring fees or interest.
Overdraft Fee
Understand what overdraft fees are, how they can impact your finances, and practical strategies to avoid them.
Overdraft Protection
Overdraft protection is a financial service offered by banks that prevents transactions from causing your account to fall below zero by automatically transferring funds from a linked account.
Payday Loan
Payday loans and online payday loans are short-term cash loans of small dollar amounts typically paid back with your next paycheck. A payday loan can give you access to quick cash when you need it most, whether it’s for daily expenses or unexpected emergencies.
Payment History
Payment history is a record of how consistently and timely an individual makes payments on their debts, significantly influencing their credit score.
Payment Plan
A payment plan is an agreement to repay a balance in smaller, scheduled amounts over time. Instead of paying one large sum, you break the cost into payments you can manage. These payments often line up with your payday, such as biweekly payments or monthly installments. A plan gives you structure, with clear due dates and a defined payoff timeline.
Personal Finance
Learn the basics of personal finance, including budgeting, saving, and investing to manage your money wisely.
Personal Loan
An unsecured loan provided by banks, online lenders, or other financial institutions that is used for personal, not business or commercial use. It is based primarily on the borrower’s creditworthiness rather than collateral.
Pre-Qualification
An initial assessment by a lender to estimate a borrower’s eligibility for a loan, based on basic financial information provided by the borrower.
Promotion
A promotion is an advancement in employment status, typically involving a higher position, increased responsibilities, and better compensation, acknowledging an employee’s contributions and potential.
401k Retirement Plan
A retirement savings plan sponsored by an employer that lets workers save and invest a portion of their paycheck before taxes are taken out.
Recession
A recession is a period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in successive quarters.
Renters Insurance
Renters insurance is a special type of insurance policy for people who rent their homes. This could be an apartment, a condo, or any other rental property. It’s designed to help protect you from unexpected costs like theft, damage, or personal injury that occurs in your home. It’s like having a backup plan that helps you handle surprises without breaking the bank.
Repayment Plans
A structured schedule for repaying a loan, specifying the amount and frequency of payments.
Risk Management
This is the process of understanding financial risks and using smart strategies to protect your money in everyday life. In personal finance, this means knowing what could hurt your finances and taking steps to reduce the impact.
Salary
A fixed amount of money or compensation paid to an employee by an employer in return for work performed. Salary is typically paid in regular installments, such as bi-weekly or monthly.
Same Day Funding
Same day funding means you could receive your loan money on the same calendar day your loan is approved and finalized. This timing depends on several factors, including when you apply, how your bank processes deposits, and your chosen funding method. Funds may be available as soon as the same day, where available and if approved.
Savings Account
A bank account that earns interest and is used for storing money not needed for daily expenses.
Secured Loans
A loan that is backed by collateral, which the lender can seize if the borrower defaults.
Securitization
The process of bundling loans or financial assets into securities that can be bought and sold in financial markets.
Short-Term Lender
A financial institution or individual that provides loans for a short duration, typically requiring repayment within a year or less.
Student Loan Forgiveness
Programs designed to cancel or reduce the amount you owe on student loans under certain circumstances, often related to your job or if you make payments for a certain number of years.
1040 Tax Form
The standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns. It includes sections to report your income, calculate deductions, and determine the amount of taxes owed or the refund due.
Take-Home Pay
Take-home pay, also known as net pay, is the amount of money you actually receive in your paycheck after all deductions are taken out. These deductions can include taxes, Social Security, health insurance premiums, and retirement contributions.
Tariff
A tariff is a tax that a government places on goods imported from other countries. This tax is usually paid by the company bringing the goods into the country. Tariffs can make imported items more expensive, which might encourage people to buy similar products made locally.
Tax Bracket
A tax bracket is a range of incomes taxed at a particular rate. In the United States, the federal income tax system is progressive, meaning that as your income increases, the tax rate on your income can also increase.
Tax Form W-9
Form W-9 is an IRS document used to request your taxpayer identification number and certain certifications. Businesses use it to prepare information returns such as a 1099; it is not a tax return. If you do not provide a correct TIN, backup withholding may apply.
Tax Refund
A tax refund is money you get back from the government when you’ve paid more in taxes throughout the year than what you actually owed. This overpayment can happen for a few reasons, such as too much being withheld from your paychecks or you qualifying for deductions or credits that reduce your total tax bill.
Taxes
Taxes are payments made to local, state, or federal governments, meant to fund public services like schools, roads, and public safety. Everyone contributes a bit from their earnings or spending, which helps keep these essential services running.
Title Loans
A short-term loan in which the borrower uses their vehicle’s title as collateral.
Unbanked
The status of not using banks or banking services to conduct financial transactions, often due to lack of access, trust, or sufficient funds.
Underbanked
Individuals or families who manage their finances through cash transactions instead of more traditional financial services such as bank accounts, credit cards, or loans.
Underwater Mortgage
A situation in which the outstanding balance of a mortgage exceeds the current value of the underlying property.
Underwriting Loans
The process by which lenders evaluate a borrower’s creditworthiness and risk before approving a loan.
Unsecured Loans
An unsecured loan is a type of loan issued by a lender without requiring the borrower to offer any collateral, such as property, vehicles, or other valuable assets, as a security for the debt. Instead, the approval and terms of the loan are typically based on the borrower’s creditworthiness, financial history, and income.
Variable Interest Rates
An interest rate that can change over time, typically based on market conditions or a predetermined index.
Variable Rate Loan
A loan where the interest rate can change, based on changes in an index interest rate.
Variable Rate Mortgages
A mortgage with an interest rate that can change periodically, often in response to changes in a specific financial index.
Volatility
A statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security.
W2 Form
Form W-2, also known as the Wage and Tax Statement, is the document an employer is required to send to each employee and the Internal Revenue Service (IRS) at the end of the year.
Wealth Management
Wealth management is a plan for your money that combines budgeting, saving, paying down debt, and setting long-term goals. It is about making steady, everyday choices to build financial stability over time.
Withdrawal
A withdrawal involves removing funds from a bank account, savings plan, pension, or trust.
Write Off
Learn what a write off is, including tax write offs and how they can reduce your taxable income. Discover the meaning behind write offs.
Yield
In finance, yield is the earnings generated and realized on an investment over a particular period of time, expressed as a percentage based on the investment’s cost, its current market value, or its face value.
Zero Down Payment
A financing option in which the borrower does not make an initial down payment when purchasing a property or asset, with the full purchase price financed by the lender.
Zero-Balance Account
A checking account set up to have a zero balance at the end of each business day. Funds are transferred into the account as needed to cover checks or withdrawals and any excess is moved out.
Zero-Based Budgeting
A budgeting method where all expenses must be justified for each new period, starting from a “zero base,” with no balances carried forward and no pre-assumed continuation for any budget item.
Zombie Debt
Old debts that are past the statute of limitations or already settled but are resurrected by debt collectors trying to pressure you into paying.