Plain-Speaking

(Beyond The Loan Jargon)

At Great Plains, we like to keep things simple. We call it plain-speaking — making the complex easy, like our simple online application, payment scheduling and e-mail reminders. But we also realize there's no shortage of confusing terms out there like "ACH" and "APRs", so we've made a list of frequently used financial terms (jargon) to help you.

Plain-Speaking: A-B

ACH

An ACH (Automated Clearing House) is a transaction processed through an automated clearinghouse network which facilitates many electronic funds transfers between banks. An automated clearinghouse is operated for the benefit of a number of banks to efficiently process the electronic funds transfers. Because an ACH typically operates only on weekdays, this also explains disclaimers like, "next business day."

ACH authorization

You can use this to make automatic payments on your loan and not miss a due date. You just need to provide written permission for your lender to withdraw a certain amount of money on specific dates directly from your checking account.

Agreement

This is what makes a loan official. The agreement is a document that formalizes the terms of the loan between you and the lender. By signing the loan agreement, you enter into a contract that holds you responsible for paying back the money borrowed and any additional interest and fees.

APR

APR stands for Annual Percentage Rate and is the interest payable on the amount borrowed and other charges expressed as an annual rate of charge.

Arrears

If you've missed loan installment payments, then you're in arrears. Are your payments overdue? You are in arrears. People in arrears may have trouble getting future credit, so talk to your creditors before it gets worse. Seek alternatives for making payments if you fall behind.

Assets

Your assets are anything you own that has financial value. Your cash, home, car, financial investments, even your home electronics are considered assets.

Balance

This can be the amount of money remaining in your checking or savings account. It could also indicate how much you owe a bank or other lender to pay off your loan.

Bank loan

An alternative to a quick, easy and convenient Great Plains Loan. Bank loans can require a face-to-face meeting with your bank manager as an additional condition prior to approval.

Bounced check

A check "bounces" when the bank account doesn't have enough funds to make payment. (See NSF below) What's that mean to you? The bank may return the check to the payee - unpaid. Now, in addition to still owing money to the intended recipient (payee), the bank will likely charge you a hefty fee.

Budget

Developing and keeping a budget is one of the best things you can do to keep your finances under control. It lists your regular income (paycheck, interest, etc) vs. regular expenses (rent, groceries, gas, movie tickets, etc.), so you can see if you're spending more than you take in.

Plain-Speaking: C-D

Cash advance

A cash advance is money provided against a prearranged line of credit such as a credit card or a loan agreement. It can also describe a small loan made over a short time period.

Charges

Financial Institutions provide various services and customers pay for the convenience and resources made available. Fees include interest charges and cash advance charges. Additionally, when their services are misused or terms are broken, most financial institutions assess penalty charges, like overdrafts charges, bounced check fees and late payment fees.

Clearing cycle

The process that checks or electronic payments go through when paid into your account. Depending on the type of credit, the clearing cycle takes different lengths of time.

Credit bureau

A credit bureau (also referred to as a Credit Reporting Agency) collects data from a number of sources and can provide information on individual consumers. This information, sometimes in the form of a credit rating, helps lenders assess credit worthiness and the likely ability of someone to pay back a loan. Examples of credit bureaus in the US are TransUnion®, Experian® and Equifax®.

Credit limit

Your credit limit is the maximum amount of money that you can borrow. The lender determines this amount based on a number of factors.

Credit rating

Credit ratings (or credit scores) are typically used by financial institutions to help them assess the credit worthiness of an individual, corporation, or even a country. They are typically derived from a number of factors including financial history and current assets and liabilities. Typically, a credit rating indicates the probability a subject will be able to pay back a loan. Financial U is a helpful resource where Great Plains customers can learn more about building their credit.

Credit report

This document summarizes your credit history, including information from credit bureaus, banks, retailers and collection agencies. It can include details of your borrowing, applications for credit, court judgments and bill payment behavior. You can get a copy of your own credit report from the credit bureaus.

Debt

Debt is money owed to a person or company. Great Plains customers can learn about healthy ways to manage debt by visiting Financial U.

Plain-Speaking: E-N

Early repayment

Paying back a loan before the arranged due date. Some banks charge fees for paying off your loan early. At Great Plains, however, you have options: pay off your loan in installments or all at once, without penalties.

Fixed-rate interest

An interest rate that stays the same rate for the term of the entire loan.

Gross income

The larger of the two income numbers on your paycheck, for instance. Gross is the amount your employer pays you before government taxes, insurance costs and retirement contributions are deducted.

Installment loan

At Great Plains, we think that an installment loan is a better choice than late fees or payday loans. We offer quick and convenient loans and have terms from 4-19 months with no penalties for early payments.

Interest

There are two ways to look at interest. First, you can earn interest on the money you save or invest (in a savings account, in your 401k, etc.). You can also pay interest on money you have borrowed (i.e. loan, credit card, cash advance). Commonly expressed as a percentage, interest is often included in the total cost of a loan. (See APR).

Loan

A loan is money borrowed on a condition that it will be paid back per the agreement. There are many types of loans, including a fast and secure installment loan from Great Plains.

Loan period

The length of time you borrow money (also known as term). Your loan period could last any number of days up to years depending upon the terms of the agreement. Typically, interest continues to accrue throughout the loan period.

Net income

The smaller of the two income numbers on your paycheck. Net income is your net (or "Take-Home") pay - the amount remaining after all deductions, such as tax or fees, have been subtracted from the gross amount.

NSF

NSF stands for Non-Sufficient Funds and means there wasn't enough money in a bank account to cover a payment. In most cases, this means additional fees or penalty charges may be assessed by the financial institution.

Plain-Speaking: O-Z

Online banking

Online banking, also called e-banking or internet banking, refers to banking services available via the web. Many of these programs allow you to check your balance, order checks, pay bills, or make a cash transfer.

Outstanding balance

The amount that still needs to be paid back on a loan (including any unpaid fees or charges). Typically, when you make regular payments on a Great Plains Loan, your outstanding balance goes down with each installment.

Payday advance

This is another way to describe a payday loan.

Payday loan

If you can't wait for your next payday, a payday loan, or payday advance, is a short-term loan that's intended to cover expenses until you get paid. The lender usually charges a fixed fee based on the amount borrowed. You typically have until your next payday to pay it off — regardless of when you apply. Payday loans often help people who can't get credit elsewhere. In most cases, an installment loan from Great Plains Lending is a better emergency cash alternative.

Penalty charges

Fees typically applied when you have broken the terms of your agreement for things like bounced checks or Non-Sufficient Funds (NSF).

Promise date

This is the date that you say you will repay your loan or make a payment on your loan.

Rate

Rate refers to the level of interest charged by a lender, and is usually represented as an annual percentage rate (APR).

Transaction

In a nutshell, a transaction is the movement of money. When you withdraw cash from your account, that's a transaction. Make a payment on your loan? Transaction.

Underpayment

A loan payment which is less than the amount you're expected to pay on a specific date.