No Fax Payday Loans | Understanding the Terms Used by the Payday Loan Industry

Like any industry, the payday loan market has its own lexicon. Many of the terms used by payday loan stores and online cash advance websites have very special meanings. To better understand how a payday loan works, it’s necessary to know the meaning of these terms. So what follows is a glossary of payday loan terms.

Annual Percentage Rate- APR

The effective interest rate charged over a period of one year for a loan. The APR factors in not only the interest paid, but also any fees or other charges. For this reason, the APR is typically higher than the quoted interest rate on a loan. For short term loans like payday loans, the APR can be very high.

Bad Credit

Bad Credit is generic term used to describe someone who is considered a “high risk” to repay loans to lenders and other finance companies. Bad credit is usually the result of poor repayment history of loans or mortgages, foreclosures, bankruptcies or a history of late payments. Bad credit is sometimes determined based on a borrower’s credit score, also known as a FICO score. Borrowers with bad credit generally poor higher interest on loans than those with a solid credit history.

Cash Advance

A cash advance is another term for a payday loan. Similar to a payday loan, a cash advance is a relatively small loan made for a short period of time. Most cash advances are for less than $500 and must be repaid in less than 30 days. As with payday loans, most cash advances are made with a credit check and are intended to help the borrower make it until payday.

Consumer Advocates

Consumer advocacy groups are those seeking to educate consumers about a variety of consumer products, including payday loans. Some consumer advocacy groups also lobby local, state and federal governments in an effort to pass laws that they believe are in the best interest of consumers. Consumer advocacy groups take several approaches to the payday industry. Some seek regulations banning payday loans completely. Others seek to have laws passed to regulate the amount of interest and fees charged by no fax and other payday loans.

Credit Check

An credit inquiry performed to obtain information about a borrower or prospective borrower’s credit history. Credit checks are usually process through one of the three large credit bureaus, Experian, TransUnion or Equifax. Credit checks will show a borrower’s credit score, payment history including late payments and write-offs, bankruptcies, foreclosures, and available credit. No fax payday loans typically do not involve a credit check.

Credit Score

Also known as a FICO score, a credit score is a number assigned by credit bureaus to borrowers that reflect the overall credit worthiness of the borrower. Credit scores range from a low of 300 to a high of 850, though some say it goes up to as high as 900. The average credit score in the United States is approximately 693.

Faxless PayDay Loan

A term adopted by the PayDay loan industry to indicate that borrowers don’t have to submit their loan application for via a fax machine. This allows borrowers to apply for a payday loan online, without the need to find a fax machine to submit additional information.

Interest

The amount of money charged by a lender to a borrower for the use of their money. It’s typically calculated as an annual percentage rate and can be fixed or variable. Unlike the APR, the interest does not include any additional fees or penalties charged by the lender. With no fax payday loans, the annual interest rate can add up to hundreds or even more than a thousand percent.

No Fax Payday Loan

A no fax payday loan is identical to a faxless payday loan.

PayDay Loan

Similar to a cash advance, a payday loan is a short-term loan for a relatively small sum of money, provided by a non-traditional lender. Th average payday loan is valued at $200-$250 and is extended for a period of 1 to 30 days.

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