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Online Loans Glossary

Loans don’t have to be complicated. Read on for a list of commonly used terms. Each is explained in simple and straightforward language. If you need further clarification of any term, call 1300 727 431 and speak to a loans professional direct.


Asset: The item/s offered as the loan’s security on a credit contract and as detailed in the Security Interest or Charge. More broadly, an asset is something of monetary value that is controlled and owned by an individual or entity and for which they have the right to transfer ownership.

Automatic transfer: A method of automatically transferring money between bank accounts at certain regular times to meet bills or other recurring payments.


Bankruptcy: A legal situation in which a person’s debts, interest payments and other financial obligations are beyond their foreseeable capacity to repay and, as such, their assets may therefore be used to service those obligations. Bankruptcy is a serious matter. Bankruptcy notifications usually stay on a person’s credit report for 5 years and will also be recorded on the National Personal Insolvency Index permanently.

Business day: A day other than a Saturday or Sunday or an official public holiday. Rapid Loans trades according to the public holiday calendar of the City of Gold Coast.

Business hours: Rapid Loans operates strictly between the hours of 8:30am and 5:00pm Australian Eastern Standard Time.


Charge: see Security Interest.

Collections agent: A person or company that can be appointed by a lender or mortgagee to recover funds should the consumer be unable to meet their repayment obligations.

Consumer: The individual, group, business or organisation that receives funds from a lender or mortgagee.

Cost of credit: The fees, charges and interest (being the annual cost rate) that Rapid Loans charges towards providing the consumer with credit.

Credit contract: The contract that a consumer enters to secure funds. It will stipulate terms and conditions, such as repayments rules and default rules, and give an overview of fees, charges and the loan term.

Credit rating: An assessment carried out in the course of a credit report to ascertain the ability and likelihood that a person or organisation seeking a loan can and will repay that loan. Ratings are assigned by Credit Reporting Bodies that are strictly independent of both lender and borrower and have nothing to gain by giving optimistic or pessimistic ratings. Important factors in assigning a credit rating include the prospective borrower’s history of late bill payments and loan defaults.

Credit report: A report provided by a Credit Reporting Body on an individual’s or company’s credit history as well as their ability to repay a loan. The report will look at other loans the consumer has applied for, the way in which those loans were repaid and the applicant’s record of on-time bill payments (among other things) to ascertain the credit rating.

Credit Sense: A fast, safe and secure way for customers to supply their bank statements electronically to credit providers during the application process. An Australian owned and operated company used by a large number of lenders across Australia, New Zealand and Canada. Using Credit Sense means Rapid Loans is able to assess your loan application efficiently without the hassle of you having to provide paper statements.


Debt consolidation: A practice of taking out a loan that allows the consumer to either pay off or substantially reduce multiple loans at once. As such, debt consolidation loans tend to be larger than the consumer’s other loans while also offering a lower or fixed interest rate. Debt consolidation loans also offer the consumer the ease of repaying their overall debt with a single payment to a single organisation, rather than individual payments to each lender.

Default: A situation in which a consumer does not fulfil their repayment obligations as set out in their loan contract.

Default fees and charges: Fees and charges due if the consumer is in default through not providing payment as set out in their credit contract.

Direct debit request: A form that authorises a lender to debit funds from the consumer’s bank account under the terms of an agreed direct debit request service agreement.


Equity: The proportion the borrower owns of the asset they are paying off with a loan. Equity is calculated based on how much the borrower has made in repayments against the asset’s market value.

Establishment fee: A fee charged to the borrower at the start of their loan when the lump sum of the loan is transferred into their account by the lender. Establishment fees are called other names by other institutions, such as set-up fee or start-up fee.

Extra repayments: Payments extra to those outlined in the agreement that a consumer can make towards their loan in order to pay off their loan faster and which may save them interest.


Fixed rate loan: A loan in which the rate at which the interest is charged does not change over the course of a loan, regardless of the changes in the official rates from the Reserve Bank. A fixed rate loan allows the borrower to know exactly how much their repayments and total interest will be before they enter the loan.

Funds: The amount of money provided by Rapid Loans, not including the cost of credit.

Funds secured: Funds provided by the lender to the consumer, plus the cost of credit (as detailed in the credit contract), plus all fees and charges incurred by way of one or more defaults, if any.


Installment: The amounts a loan is equally divided into for regular repayment. Installment is more specific than the term “repayment” in that it is a set amount for routinely occurring repayments.

Insurance: Insurance taken over the assets, prescribed in the Security Interest or Charge and the secured credit contract, as deemed suitable by Rapid Loans.

Interest: An amount of money paid to the lender in return for accessing the funds loaned. In this sense, it is similar to rent paid on a house, but the asset in question is the loan sum itself rather than a house. Interest is not a ‘fee’ and is instead calculated as a percentage of the total sum borrowed.


Maximum loan amount: The most a certain borrower can access based on their credit history, the lender’s business rules and the credit contract.

Minimum loan amount: The least amount the lender is prepared to give a borrower.

Mortgagee: The person or company lending or offering to lend funds secured with property.

Mortgagor: The person or company borrowing or seeking to borrow funds via a loan secured with property.


Payment: Funds paid by the consumer to the lender, or debited directly from the consumer’s bank account, on prescribed dates that go toward incrementally discharging the consumer’s financial obligations under their credit contract.


Secured loan: A loan in which the borrower uses an asset as collateral or the amount they are borrowing. This collateral gives the lender more security on the risk they assume by offering the loan. Should the borrower be unable to meet their loan terms, the lender may then assume ownership of the asset.

Secured property: Property that is the subject of the charge that secures the funds. It is called the ‘security’. Over an unsecured loan, this security means the lender assumes a lower risk in lending.

Security Interest: The rights Rapid Loans assert over the assets detailed in the Security Interest or Charge document. These rights permit Rapid Loans to take possession and dispose of the asset to recover funds should the Consumer default on their payment instalments.

For further clarification of any of these terms call Rapid Loans direct on 1800 192 868.