Credit Check

A credit check is the process of reviewing the borrower’s credit history to assess their creditworthiness. Loan apps often perform a soft or hard credit check to decide whether to approve the loan and set terms.

Collateral

Collateral refers to an asset pledged by the borrower to secure a loan. If the borrower defaults on the loan, the lender can seize the collateral to recover their losses. Common types of collateral include property, cars, and financial assets.

Cash Limit

Cash limit refers to the maximum amount a borrower can withdraw or borrow through a loan app. This limit can be determined by the borrower’s credit score, income, or repayment history.

Borrower

The borrower is the individual or business applying for the loan. Borrowers are required to meet certain criteria, such as a minimum credit score, before they are eligible for approval.

APR (Annual Percentage Rate)

APR represents the total cost of borrowing, including interest and fees, expressed as an annual percentage. It provides borrowers with a clear understanding of the cost of a loan over a year. A higher APR indicates a more expensive loan.

Application Fee

This is a fee charged by lenders for processing a loan application. It covers the administrative costs of reviewing and processing the borrower’s request. Not all loan apps charge an application fee.