Glossary of Personal Loan Terms

If you’re interested in taking out a personal loan to help you pay expenses until your next paycheck, be sure to find an offer with low interest rates. Glendale Banking Rates provides comparisons of various personal loan interest rates and lenders so you can find an affordable personal loan rate easily.

Before you speak with a lender about obtaining a personal loan, familiarize yourself with the following common personal loan terms:

Collateral: Personal property to offer as a guarantee you will pay your loan back. If you default on your loan, the property may be seized.

Fixed Interest Rate: An interest rate that the borrower and lender agree upon and does not change for the entire term of the loan.

Interest: Additional percentage of the amount borrowed that the borrower is charged, usually monthly, until the principal is paid off.

Principal: The total loan amount, not including interest.

Term: Time limit within the loan must be paid.

Variable Interest Rate: An interest rate that fluctuates over the term of a loan according to an index.


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