When it comes to getting a loan, there are some words/terms that may be unfamiliar to you especially if this is your first loan. We curate these terms and try to explain them as simply as possible to our customers — here are some of them:
Payoff/Liquidation Amount: This is the amount you need to completely pay off your loan and it includes the outstanding principal, interest and any other fees. The amount is updated daily so paying your balance the same day you receive it is very important.
If you’d like to know your liquidation amount with Renmoney, please send an email to hello@renmoney.com and we’ll be happy to help.
Debt-to-Income (DTI) ratio: Your debt-to-income ratio is the percentage of your gross monthly income that goes to paying your monthly expenses & debts. Credit providers or lenders love to see low DTIs when issuing loans to you as that means you’ll find it easier to meet your monthly repayments conveniently and on time.
Responsible lenders will not extend credit to you if you’ve maxed out your DTI as that will just place higher pressure on your already stretched resources.
Here is how you can calculate your DTI by yourself:
DTI= Total monthly debt & expenses/ Gross monthly income
Loan calculator: A loan calculator is a tool that can help you calculate the repayments on your loan including the interest.
We have a handy loan calculator on www.renmoney.com that you can try out today. Simply enter the loan amount and the loan term and you’ll get an indicative monthly repayment.
Loan default: When you take a loan and stop making agreed loan repayments, you “default” on the loan. A default has adverse effects on your credit profile and ability to borrow in the future so you should be careful not to miss any loan repayments agreed with a lender.
A good idea is to set up automated repayments on your account on or immediately after dates when you expect cash inflows. Lenders will help you determine these dates and set up your repayment instrument. You can refer to the repayment schedule on your loan offer letter to see your monthly repayment date & amount.
Need money? You can get a convenient Renmoney loan on www.renmoney.com today and if you prefer to speak with someone, please call 0700 5000 500.
