Volume One — Consumer Credit
Read your own loan paperwork and know exactly what it says.
A free reference desk for anyone holding a credit offer, a signed agreement, or a word they cannot place. We take the language that appears on real loan documents and set it out in ordinary English, with the arithmetic shown.
- Free to read, no account required
- Not a lender — nothing here to apply for
- Worked examples only, never a quotation
Find the right explainer for your situation
Three questions, answered in about ten seconds, and the reading list narrows to the one entry that covers the ground you are standing on.
Guided match
Nothing you pick is sent anywhere or stored. The recommendation is worked out in your browser and it changes as you answer.
Your matched entry
How Loan Interest Actually Works
Answer the three questions and the reading list narrows to one entry.
Read this entryA match is a reading suggestion, not advice about your credit. Every entry stays open to everyone — ignore the suggestion and read whichever you like.
The library
Five entries, written to be read in order or raided for the one section you came for. Each has its own contents list down the side.
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How Loan Interest Actually Works
APR is not the interest rate. Amortisation is not a mystery. The arithmetic behind every instalment loan, worked through slowly.
9 min read -
What Lenders Look At in an Application
Credit history, capacity, capital, collateral, conditions. What each one means in practice and which of them you can move.
8 min read -
Secured and Unsecured Loans Explained
What a lien really does, why collateral lowers a rate, and the specific risk you accept when you pledge something you own.
7 min read -
Reading a Loan Agreement Before You Sign
A clause-by-clause walk through the document: the Truth in Lending box, prepayment terms, default triggers, fee schedules.
10 min read -
A Glossary of Lending Terms
More than fifty terms you will meet on a loan document, defined in ordinary language and cross-referenced.
12 min read
How this library works
There is no funnel here. Three steps, and the third one happens somewhere else entirely — with a lender we have nothing to do with.
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Bring the document you actually have
An offer, an agreement, a statement, or just a phrase that stopped you. Every entry is built around the paperwork rather than around a product we want to sell you.
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Read the section, not the whole book
Each entry carries its own contents list and is written so a single section stands on its own. The calculator lets you reproduce the disclosure figures yourself.
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Go back to the lender better armed
We have no application, no rate table and no partner to hand you to. You take what you learned to a licensed lender and read what they give you.
How to read a loan offer in four passes
Most people read a credit offer once, from the top, and absorb the monthly payment. Four short passes catch almost everything that matters.
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Find the APR, not the rate
The interest rate prices the money. The annual percentage rate prices the money plus the fees you were charged to get it, expressed as one annual figure. Two offers at the same interest rate can carry very different APRs, and the APR is the number the law makes lenders disclose precisely so that offers can be compared. The arithmetic is set out here.
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Multiply the payment by the number of payments
An affordable monthly payment stretched over a long enough term becomes an expensive loan. Total of payments is a required disclosure for a reason. Do the multiplication yourself before you look at anything else in the offer, and compare it to the amount you are actually receiving.
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Ask what happens if you are late
The fee schedule, the grace period, the default definition and the acceleration clause live in different parts of the document and describe one continuous process. Read them together. Clause by clause, here.
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Establish what secures it
If something you own is pledged, the consequence of non-payment is not a collection call — it is the loss of that asset through a process the agreement already describes. What a lien actually does.
The same loan, three ways of describing it
One hypothetical — $12,000 borrowed for 48 months — shown under three different framings. Nothing here is an offer; it is arithmetic used to make a point about which number tells you the most.
| Framing | What it emphasises | What it hides | Usefulness |
|---|---|---|---|
| “Low monthly payment” | Cash flow this month. | The term. A payment can always be lowered by lengthening the loan. | Low |
| “Rate from X%” | The price of the money for the best-qualified applicant. | Fees, and whether you qualify for the advertised tier at all. | Medium |
| APR and total of payments | Everything you pay, and what it costs annualised. | Very little — this is the comparison pair. | High |
A standing warning
Any figure on this site is an illustration written to explain a mechanism. We do not know your credit profile, we are not quoting you, and we have no lender relationship that produces a rate for you. Where you see a number, treat it as a worked example in a textbook.
What this site is, and is not
It is an explainer
Every entry is written to be understood by somebody who has never worked in finance, and checked so that somebody who has would not wince. Where a term of art is unavoidable, it is defined in the sentence that introduces it and again in the glossary.
It is not a lender
We do not make loans, take applications, pull credit, or hold your money. There is no “apply now” button, because we have nothing to apply for. When you are ready to borrow, you deal with a licensed lender directly and read what they hand you.
It is not advice
General education is not a recommendation about your circumstances. Whether a particular loan is a good idea for you depends on facts we do not have. For that conversation, use a licensed professional or a non-profit credit counsellor.
Questions readers actually ask
Short answers. Where the honest answer is “no”, it says no.
Do you lend money, or pass my details to someone who does?
No to both. We do not make loans, broker loans, service loans, take applications or accept deposits, and there is no application form on this site to fill in. There is nothing to hand on, because we never collect it in the first place.
Are the rates and figures on this site real offers?
No. Every number here is an illustration written to explain a mechanism, and the calculators are teaching devices that run in your browser. We do not know your credit profile and we have no lender relationship that could produce a rate for you.
Do I need an account to read anything?
No. Every entry, the glossary and the calculator are open to everyone with no sign-in. The optional member desk exists only so you can save entries and keep private notes on documents you are working through. There is no credit check, because there is no credit product.
Why is the APR different from the interest rate I was quoted?
The interest rate prices only the money. The APR prices the money plus most of the fees charged to obtain it, expressed as a single annual figure, which is why a loan with an origination fee carries a higher APR than its stated rate. The arithmetic is worked through in Entry I, with a calculator that shows the two numbers converging when you set the fee to zero.
Can you tell me whether a particular loan is a good deal?
No. That depends on your income, your obligations, what the money is for and what else you have been offered — facts we do not have and do not want. What we can do is make sure you can read the offer well enough to judge it, and point you at a licensed professional or a non-profit credit counsellor for the rest.
Where do the glossary definitions come from?
They describe general United States consumer lending practice and the standard disclosures required under the Truth in Lending Act. They are written for education. Your own agreement may define a term differently, and where it does, your agreement governs.
Is any of this financial, legal or tax advice?
No. Loan Information Center is an independent educational publisher, not a bank, a credit union, a law firm or a credit repair organisation. Read your own agreement, and take advice from a licensed professional before you borrow.
The member desk — optional, free
Keep a reading desk of your own.
Somewhere to save entries, keep private notes on the documents you are working through, and track where you got to. No credit check, because there is no credit product.
- 01Save any entry and pick it up where you left it.
- 02Keep notes against the loan documents you are reviewing.
- 03Nothing is sold on, because there is nothing to sell.