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Personal Banking

Loan Glossary

Annual Percentage Rate (APR)
The total finance charge (including interest, points, and other finance charges) expressed as a percentage of the amount financed.

Automatic Payment
Bremer allows you to make automatic payments on your loans or lines of credit from your Bremer savings or checking accounts. This means a set payment amount is automatically taken out of your account every month on the day specified.

Collateral (or security)
Personal property pledged as a guarantee that you will repay your loan. Property such as houses, cars, savings accounts, bonds, or certificates of deposit are commonly used as collateral.

Credit Agencies/Credit Bureaus
Organizations that collect individual consumer credit information and provide credit reports to potential lenders, employers, landlords, etc., for purposes of aiding in their decision-making process.

Equity
The difference between the current value and the outstanding liens on a property.

Finance Charges
The total cost of interest and other charges, direct or indirect, the borrower must pay to obtain credit.

Fixed Interest Rate
An interest rate the borrower locks into at the origination of the loan and does not change during the term of the loan.

Index
The indicator of current economic conditions used to determine changes in adjustable loan interest rate.

Interest
A charge for money borrowed generally stated as a percentage of the amount borrowed.

Line of Credit
An extension of credit subject to a variable interest rate that may be borrowed against when needed.

Note
A written promise to pay a stipulated sum of money to a party under mutually agreed upon conditions. Also called a promissory note.

Point
An amount equal to one percent of the loan amount.

Pre-payment Penalty
A penalty fee charged to a borrower who pays off a loan before the term of the loan is complete. Bremer does not have a pre-payment penalty, so you can pay off your loan as early as you choose and you pay interest only for the amount you have borrowed for the length you need it.

Principal
The loan amount not including interest.

Secured Personal Loan
A fixed interest rate personal loan that requires collateral or security of a savings account, stocks, bonds, certificates of deposit, etc.

Term
The time limit within which a loan must be repaid.

Title
Rights of ownership of property.

Title Insurance (including Owners and Mortgage policy)
Insurance which protects the lender and the homeowner against loss resulting from any defects in the title or claims against a property that were not uncovered in the title search.

Underwriting
The process of determining risk inherent in a particular loan and establishing suitable loan terms and conditions.

Unsecured Personal Loan
A fixed interest rate personal loan that requires no collateral or security.

Variable Interest Rate
An interest rate which is tied to an index, such as the Wall Street Journal Prime, and fluctuates during the life of the loan.

All loans are subject to credit approval, acceptable collateral, and available equity. Bremer Bank, N.A. loans are available to residents located in the states of North Dakota, Minnesota, and Wisconsin.