Loan terms and their meaning

Loan terms and their meaning

Loan terms and their meaning

Jun 6, 2023

When it comes to loans, there are several common terms that you should be familiar with and if it is your first time taking a loan you might be unfamiliar with them. We have made a list of these terms and explained them as simply as possible.

Principal amount

This refers to the initial amount of money borrowed from a lender. It is the initial size of the loan before the cost of borrowing is added.

Interest rate

It is the cost of borrowing. The total interest on a loan amount depends on the principal amount and the repayment times selected. However,  your interest rate can either be high or low base on risk assessment; if considered a low-risk borrower, you are most likely to get a lower interest rate.


This refers to the act of paying out a loan to a borrower. This is the final stage of acquiring a loan, where the lender accepts your loan requests and processes funds. QuickCheck disburse loans to the borrower bank account usually under 


This refers to the criteria by which the lender assesses the creditworthiness of a customer. A quick check is done on your credit history to determine your eligibility status.

Loan default

This occurs when a borrower fails to meet the agreed-upon terms of the loan. Defaulting on a loan can reduce your credit score, and ability to get subsequent loans and also lead to high interest rates on future loans. 

These are key loan terms you may encounter when borrowing money. It is also important to review and understand the terms and conditions of any loan agreement before committing to it.

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