Author Topic: Help decypher loan jargon?  (Read 2215 times)


  • 5 O'Clock Shadow
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  • Age: 35
  • Location: Minneapolis, MN
Help decypher loan jargon?
« on: February 06, 2013, 08:03:45 PM »
I sent in an email to the Lending Club to ask a few questions. Unfortunately I'm having trouble actually understanding their response because I'm not especially familiar with the vocabulary. Could you help me understand?

Here is my original message to them:
Can you explain how the interest rate differs from the APR? How to they work together? If I pay off what is due early, can I avoid paying as much interest? Or since lenders are planning to receive that interest as investments, will that interest always be baked in nomatter what?

Here is there response:
All rates you are quoted are fixed. The interest rate is what you are paying on a monthly basis and the APR (Annual Percentage Rate) is a general overview of all interest and fees paid over the course of the year. The origination fee is included in the Annual Percentage Rate calculation and is subtracted from the loan proceeds prior to disbursement. If you decide to pay your loan off early, you would only pay interest up until the month that you hold the loan.

Thanks in advance!


  • Walrus Stache
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Re: Help decypher loan jargon?
« Reply #1 on: February 06, 2013, 09:23:59 PM »
APR is a fake number that is based on interest + fees.  See

If you pay off early, you stop paying interest.  But you may have already paid a lot of fees.