Personal Credit Glossary

Annual Percentage Rate (APR)
A term representing the total cost of credit. The APR of a loan is the total finance charge, including interest and fees, expressed as a yearly rate.

Automatic Payment
With automatic payments you can have your monthly payment deducted from your Wells Fargo Checking or Savings account. You may be eligible for a discount on your interest rates when you sign up for automatic payment at the time you apply.

Collateral (or Security)
Personal property, such as a house, car, Wells Fargo Savings account, stock, bond, or Time Account (CD), pledged as a guarantee that you will repay your loan.

Credit Agencies (or Credit Bureaus)
Organizations that collect individual consumer credit information and provide credit reports to potential lenders, employers, landlords, etc., for the purpose of aiding in their decision-making process.

Debt Consolidation
Financial strategy in which you take out a low-rate loan to pay off one or more high-interest loans or credit cards.

Fixed Interest Rate
An interest rate that does not change during the life of the loan.

Interest
Formal term for the amount you pay to use money. Interest is expressed as a percentage of the amount you borrow. It does not include extra charges such as fees. These are included in the annual percentage rate.

Personal Line of Credit
A variable interest rate personal line of credit that requires no collateral or security.

Personal Loan
A fixed interest rate personal loan that requires no collateral or security.

Prepayment Penalty
A fee charged to a borrower who pays off a loan before it is due. There is no prepayment penalty for a Wells Fargo Personal Loan. You can pay your loan back early if you choose, without fees or fines.

Prime Rate
The most favorable interest rate charged by lenders on a short-term loan to qualified customers. There is also a prime rate average listed in the Wall Street Journal that is an average of what the largest commercial banks charge. Rates (APRs) are established as the prime rate plus an additional amount.

Principal
The amount borrowed, not including interest.

Recreational Vehicle (RV) Loan
A secured loan used to purchase a recreational vehicle. The RV is used as collateral for the loan.

Term
The time limit during which a loan must be repaid.

Time Account (CD)/Savings Secured Line of Credit
A variable interest rate personal line of credit that requires collateral or security of a Wells Fargo Savings or Time Account (CD).

Time Account (CD)/Savings Secured Loan
A fixed interest rate personal loan that requires collateral or security of a Wells Fargo Savings or Time Account (CD).

Used Auto Loan
A secured loan used to purchase a pre-owned vehicle. The auto is used as collateral for the loan.

Variable Interest Rate
An interest rate that is tied to an index, such as the Wall Street Journal Prime Rate, and fluctuates during the life of the line of credit.