Personal Loans Glossary - Wells Fargo

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Personal Loans 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 deposit account. If you have a Wells Fargo account, you may be eligible for a discount on your interest rates when you sign up for automatic payment at the time you apply.

CD/Savings Secured Loan
A fixed interest rate loan that requires collateral, secured by a Wells Fargo Savings account or CD.

Collateral (or Security)
Personal property, such as a car, Wells Fargo Savings account or CD, pledged for the payment of a 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 Loan
Unsecured loan with a fixed monthly payment, fixed term and fixed interest rate.

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 additional fees or fines.

Prime Rate
An interest rate determined by large individual banks, reported by the Federal Reserve Board. It is often used as a reference rate (also called the base rate) for many types of loans.

Principal
The amount borrowed, not including interest.

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