The westside lending glossary defines the words you will meet when you request, compare and repay a personal loan between $500 and $5,000. Each entry is short and practical, with an example where a number helps. Terms are grouped alphabetically, so jump to the letter you need or read straight through before you review an offer.
How to use the westside lending glossary
The westside lending glossary works best as a reference you check while reading a lender's offer or disclosure, since every term below appears on real personal loan paperwork or in conversations with lenders.
Definitions describe how a term is usually used across the industry. Individual lenders sometimes apply their own wording or rules, so your loan agreement is always the final word. Payment figures are estimates only. Westside Lending is a free connector service, not a lender, and it does not set rates, fees or terms. Definitions are reviewed by the same writers who produce the westside lending blog. For a deeper look at pricing, the personal loan rates guide explains what moves an APR up or down.
Personal loan terms A–B
Personal loan terms starting with A and B cover how payments are scheduled and collected, how yearly costs are measured, and how balances can move between accounts.
- ACH transfer
- An ACH transfer is an electronic payment sent through the Automated Clearing House network that links U.S. banks. Most lenders in the westside lending network use ACH to deposit funds into your checking account and to collect monthly payments. Transfers usually settle within one to three business days.
- Amortization
- Amortization is the process of paying off a loan in equal installments, where each payment covers that month's interest first and the rest reduces the principal. Early payments are interest-heavy; later ones go mostly to principal. An amortization schedule lists how every payment is split over the full term.
- APR (annual percentage rate)
- The APR is the yearly cost of borrowing, including the interest rate plus certain fees such as an origination fee. Because it bundles those costs, APR is the best single number for comparing personal loan offers. Typical personal loan APRs run from about 6% to 35.99%, though offers vary by lender.
- Autopay
- Autopay is an arrangement where the lender automatically withdraws your payment from your checking account on the due date. It helps you avoid late fees and missed payments. Some lenders offer a small APR discount for enrolling, so ask whether one is available.
- Balance transfer
- A balance transfer moves debt from one credit card to another, often to take advantage of a low promotional rate. Most transfers carry a fee of around 3% to 5% of the amount moved. Once the promotion ends, the remaining balance usually reverts to the card's regular rate.
Personal loan terms starting with C
Credit-related terms make up most of the C entries, covering how your borrowing history is recorded, scored and used by lenders when they review a personal loan request.
- Cash advance
- A cash advance lets you withdraw cash against a credit card's limit. Card issuers usually charge a fee and a higher APR on advances, and interest often starts the same day with no grace period. For larger sums, a fixed-rate installment loan is often cheaper.
- Charge-off
- A charge-off happens when a lender writes off a debt as unlikely to be collected, usually after about 180 days of missed payments. You still owe the money, and the account may be sold to a collection agency. A charge-off stays on a credit report for up to seven years.
- Co-signer
- A co-signer is a second person who signs your loan and agrees to repay it if you do not. A co-signer with strong credit can help you qualify or get a lower rate. The debt appears on both credit reports, and missed payments hurt both people.
- Collateral
- Collateral is an asset, such as a car or savings account, that you pledge to secure a loan. If you stop paying, the lender can take the collateral to recover its money. Most small personal loans are unsecured and require no collateral.
- Credit bureau
- A credit bureau is a company that collects information about how you use credit and sells it as credit reports. The three national bureaus in the U.S. are Equifax, Experian and TransUnion. Lenders report your payments to one or more of them; westside lending itself does not report to the bureaus.
- Credit report
- A credit report is a record of your credit accounts, balances, payment history, inquiries and public records. Lenders review it to judge how you have handled debt.
- Credit score
- A credit score is a three-digit number, usually between 300 and 850, that summarizes the risk shown in your credit report. Higher scores generally qualify for lower APRs. Payment history and credit utilization are the two biggest factors in most scoring models.
- Credit utilization
- Credit utilization is the share of your available revolving credit that you are using. A $1,500 balance on cards with a combined $5,000 limit is 30% utilization. Keeping utilization low, ideally under 30%, generally supports a stronger credit score.
Personal loan terms D–G
Terms from D to G describe what happens when payments fall behind, how debt load is measured, and how a fixed rate or grace period affects the cost of a personal loan.
- Debt consolidation
- Debt consolidation means combining several debts, often credit card balances, into a single new loan with one monthly payment. It can lower your interest cost if the new APR is below your current rates. It works best when you stop adding new balances to the cards you paid off.
- Debt-to-income ratio (DTI)
- Your debt-to-income ratio is your total monthly debt payments divided by your gross monthly income. Someone paying $1,200 a month on debts with a $4,000 gross income has a 30% DTI. Many lenders reviewing a westside lending request prefer a DTI below about 36% to 40%, though limits vary.
- Default
- Default is the failure to repay a loan as agreed in your contract. The exact point at which a loan is in default depends on the lender, but it usually follows several months of missed payments. Default can lead to collections, a charge-off and serious credit damage.
- Delinquency
- Delinquency means a payment is past due. Lenders typically report a delinquency to the credit bureaus once a payment is 30 days late, and later reports at 60 and 90 days add more damage. Catching up quickly limits the harm to your score.
- Fixed rate
- A fixed rate stays the same for the life of the loan, so your payment never changes. Most offers that follow a westside lending request carry a fixed rate, which makes budgeting simpler. Variable-rate products can rise or fall over time.
- Grace period
- A grace period is a short window after the due date, often 10 to 15 days, during which a lender accepts a payment without charging a late fee. Not every lender offers one.
- Gross income
- Gross income is your total pay before taxes and deductions. Lenders often use gross income to calculate your debt-to-income ratio. Your budget, however, should be based on net income, since that is what actually reaches your bank account.
Personal loan terms H–L
Terms from H to L explain credit inquiries, hardship help, interest, installment structure and the core paperwork behind any personal loan, including who the lender is and what the agreement requires.
- Hard credit inquiry
- A hard credit inquiry happens when a lender pulls your full credit report to make a final lending decision. It appears on your report and can lower your score by a few points, usually for a short time. Many lenders run a hard inquiry only if you accept an offer and they finalize the loan.
- Hardship plan
- A hardship plan is a temporary arrangement a lender may offer if you face job loss, illness or another setback. It might reduce or pause payments for a few months. Not all lenders offer one, so contact yours before you miss a payment.
- Installment loan
- An installment loan is repaid in a fixed number of scheduled payments, usually monthly, until the balance reaches zero. Personal loans and auto loans are common installment loans. A predictable payment and a set end date are the main advantages.
- Interest
- Interest is the price you pay to borrow money, charged each month on the remaining principal of an amortizing personal loan. Paying extra toward principal reduces future interest.
- Joint application
- A joint application is a loan request made by two borrowers who share equal responsibility for the debt. Lenders consider both applicants' credit and income, which can help with approval or pricing. Unlike a co-signer, a joint borrower usually also has access to the funds.
- Late fee
- A late fee is a charge added when a payment arrives after the due date or grace period. It may be a flat amount or a percentage of the payment, subject to state rules. Late fees are listed in your loan agreement.
- Lender
- A lender is the company that funds your loan, sets its rate and terms, and collects repayment. Westside lending is a connector rather than a lender; it passes your request to lenders in its network, which is why people who search for west side lending sometimes confuse the two roles. Your loan agreement and payments are always with the lender.
- Loan agreement
- A loan agreement is the legal contract between you and the lender. It lists the amount, APR, fees, payment schedule, late charges and your rights. Read it fully before signing, since its terms override any advertised figures.
- Loan term
- The loan term is how long you have to repay, usually stated in months. Personal loans from $500 to $5,000 commonly run 3 to 36 months. A longer term lowers the monthly payment but raises total interest.
Personal loan terms M–P
Terms from M to P cover take-home pay, origination and prepayment costs, and the principal you borrow, all of which shape the real cost of a personal loan offer.
- Net income
- Net income, or take-home pay, is what remains after taxes, insurance and retirement deductions. A sensible personal loan payment fits comfortably within net income after rent, utilities and other bills. The westside lending request form asks about income so lenders can judge affordability.
- Origination fee
- An origination fee is a one-time charge some lenders take for processing a loan, often 0% to about 10% of the amount. It is usually deducted from the funds before they reach you, so a $2,000 loan with a 5% fee deposits $1,900. The fee is included in the APR.
- Payment history
- Payment history is the record of whether you paid past debts on time. It is the single largest factor in most credit scores. A steady run of on-time payments can help rebuild a damaged score over time.
- Prepayment penalty
- A prepayment penalty is a fee for paying off a loan early. Most small installment loans do not have one, but some lenders include it to recover lost interest. Check your loan agreement before signing if you plan to pay ahead.
- Prequalification
- Prequalification is a lender's early estimate of whether you might qualify and at what rate, usually based on a soft credit inquiry. It does not affect your score and is not a final approval.
- Principal
- Principal is the amount you borrow, not counting interest or fees. On an amortizing loan, each payment reduces principal by a growing amount. Extra payments applied to principal shorten the loan and cut total interest.
Personal loan terms R–S
Terms from R to S explain revolving credit, refinancing a personal loan, and the difference between secured and unsecured borrowing and between soft and hard credit checks.
- Refinancing (personal loan)
- Refinancing a personal loan means taking out a new loan to pay off an existing one, ideally at a lower APR or with a better term. It can reduce your payment or total cost. Compare any new origination fee against the interest you expect to save.
- Revolving credit
- Revolving credit lets you borrow, repay and borrow again up to a limit, as with a credit card or line of credit. Payments vary with the balance. Revolving balances count toward credit utilization, while installment loans generally do not, which is why west side lending borrowers sometimes use a loan to pay down cards.
- Secured loan
- A secured loan is backed by collateral such as a vehicle or savings account. Pledging collateral can lower the rate or help a borrower with weaker credit qualify. The risk is losing the asset if you cannot repay.
- Soft credit inquiry
- A soft credit inquiry is a light review of your credit used for prequalification, account monitoring or checking your own score. It does not affect your credit score and is not visible to other lenders. Many lenders use a soft inquiry to show offers after a westside lending request.
Personal loan terms U–V
Terms from U to V describe how lenders review and confirm the information on a personal loan request, and what makes most small personal loans unsecured.
- Underwriting
- Underwriting is the lender's process of reviewing your credit, income and debts to decide whether to lend and on what terms. Underwriting rules differ from lender to lender, which is why offers from the west side lend network vary.
- Unsecured loan
- An unsecured loan requires no collateral; the lender relies on your credit and income. Most loans requested through west side lending in the $500 to $5,000 range are unsecured. Rates tend to be higher than on secured loans because the lender takes more risk.
- Verification
- Verification is the step where a lender confirms details from your request, such as identity, income and bank account. You may be asked for a pay stub, benefit letter or photo ID. Responding quickly helps keep funding on schedule, and a westside lending advisor can explain what lenders typically request.
Where these terms appear on a west side lending offer
Most of the terms above appear on the lender's Truth in Lending disclosure, which lists the APR, finance charge, amount financed and total of payments for every personal loan offer you receive.
When an offer arrives after a westside lending request, read the disclosure box first. Compare the amount financed, the finance charge and the total of payments across offers; together they tell you more than the monthly payment alone.
As a reference point, the representative example used across the site is $2,000 borrowed for 12 months at 24.99% APR, which is about $190 per month and about $2,281 repaid in total, or about $281 in interest. Estimate only. If you want to test other combinations, the personal loan calculator shows payments for any amount from $500 to $5,000.
Readers who search for west side lend definitions often want to know which terms matter most before signing. Focus on four: APR, origination fee, loan term and prepayment penalty. Those decide the real cost of a personal loan and how flexible it is. The eligibility requirements page explains how lenders use terms like debt-to-income ratio and credit score when they review a request, and the frequently asked questions page answers common follow-ups in a sentence or two.
The westside lending editorial team adds new glossary entries when borrowers ask about words not yet listed. Questions can go to [email protected] or (888) 245-7685. Advisors can explain what a term means, but only the lender can tell you how it applies to your specific personal loan.