Annual fee: A fee that a lender may charge on a yearly basis to cover the administrative costs of a loan.

Annual percentage rate: The annual percentage rate is the amount of interest that you pay on your loan and is the cost of your loan as a yearly rate.

Application fee: Some banks may charge an application fee in order to process your loan. This is a one-time fee charged at the point of your application.

Broker: A professional who acts as an intermediary between the borrower and the lender. A broker usually works with a network of lenders in order to get the best rate possible for his or her clients.

BSB: The BSB is the number that identifies the bank and branch at which an account is being held. BSB stands for Bank, State, Branch.

Collateral: Collateral is assets that are used to secure a loan. If the loan is not paid back in accordance to the terms of the loan, then the collateral used to secure the loan can be seized by the lender. Personal loans are loans that do not usually require collateral.

Comparison rate: The comparison rate is used to compare the actual loan rate by taking the other costs of the loan into consideration.

Credit rating: Your credit rating determines your creditworthiness. It is an evaluation of your history of repaying your past loans. The better your credit rating, the more likely that you will be approved for a loan and the lower your interest rate will be. For more information see your credit report

Fixed interest rate: With a fixed interest rate, your interest rate remains the same throughout the term of the loan. The rate cannot go up or down.

Principal: The principal of your loan is the original amount of money you borrowed. This is the amount that your interest is calculated on. As you pay on your loan, a portion of the payment goes towards the principal and a portion goes towards the interest.

Secured loan: A secured loan is a loan that is secured by collateral. If you should default on your loan, the collateral used for the loan can be seized by the lender to repay the loan.

Sub-Prime lending: Sub-prime lenders are those lenders that lend out money to people with tarnished credit histories. These lenders tend to charge a lot more interest than traditional lenders charge. If at all possible, it is best to avoid sub-prime lenders.

Unsecured loan: With an unsecured loan, there is no collateral required to obtain the loan. Because of this, the interest rate on unsecured loans is usually higher than interest rates available for secured loans.

Variable interest rate: When you take out a loan with a variable interest rate, the interest rate that you pay on that loan will change according to the controlling prime rate. A variable interest rate can go up or down throughout the course of your loan.