Glossary
Credit terms, explained
Clear, jargon-free definitions to help you understand your loan.
APR (annual percentage rate)
The all-in yearly cost of borrowing, including interest and fees, expressed as a percentage — the best single number for comparing loan offers.
Credit score
A number, typically between 300 and 900 in Canada, that summarizes your creditworthiness according to the Equifax and TransUnion credit bureaus.
Line of credit
Revolving credit you can draw from as needed, paying interest only on the amount you actually use.
Payday loan
A small, very short-term, very high-cost loan, regulated at the provincial level, best considered only as a last resort.
Principal
The original amount borrowed, before any interest is added.
Secured loan
A loan backed by collateral, such as a car or savings, which usually earns a lower interest rate but puts the asset at risk.