Please refer here if there are any terms that are referenced in any of our communications with you, that you may not yet understand.
| Term | Definition |
|---|---|
| Account Closed | We will receive this error from your bank if the account on your file has been closed. Please ensure you provide a new account number right away to the Loan Management Team. |
| Amortization Schedule | A table that lists the payments of a loan over time. Also known as a repayment schedule. It will provide details on how much interest (if applicable) and principal will be paid at each scheduled payment, until the principal that was borrowed plus all outstanding interest (if applicable) is repaid. |
| Arrears | Also known as a missed payment: a scheduled payment that was not paid as scheduled due to non-sufficient funds, account closure, or other issues that prevent the scheduled payment. |
| Bank Account Number | A unique series of numbers that will identify an account with a banking institution. It will be used to indicate where funds are being transferred from (your account) and to (Windmill's account). |
| External Collections | Also known as debt collections, these organizations will contact individuals in an attempt to recover unpaid debts. A company, including Windmill, may send any unpaid debt to an debt collections agency if there are several missed payments on your account that go unpaid. To avoid this action, always ensure you pay the debts you borrow, as scheduled. |
| Credit History | A credit history offers a detailed look at how many lines of credit, be it bank loans, mortgages, credit cards, etc. that you have. Credit bureaus (like Equifax) will monitor your credit history and generate credit reports that detail your credit history - either at your request or at the request of other lenders - to review your credit worthiness. There are many resources online to learn more about credit reporting. Here is a good place to start. |
| Credit Score | A credit score is used to show the risk you may represent to a lender, compared to other consumers. A credit score is often referred to as a FICO or Beacon score. You can learn more about credit scoring here. |
| Delinquent | When an individual is late or overdue on a payment. The consequence for being delinquent depends on the type, duration, and cause of the delinquency. |
| Direct Deposit Form | This form is available from your banking institution, often online. It is used as documentation to confirm your bank account details, to set up pre-authorized payments on your loan. |
| Disbursement | A transfer of funds from the approved loan to the bank account on file. Once a disbursement is made, the principal outstanding on your loan increases and interest is calculated on the new principal amount. |
| Equifax | One of the three largest consumer credit reporting agencies in Canada, which collects and aggregates information on individual and business consumers. Windmill Microlending requests credit history reports from Equifax and reports loan activity to Equifax. |
| Installment Loan | A type of credit product where after borrowing funds, a borrower must repay the loan over a fixed period of time. Payments are usually monthly. |
| Interest | Also referred to as rate of interest, which is equal to the interest amount paid or received over a particular period, divided by the principal borrowed. It is usually expressed as a percentage. You can learn more about interest by clicking here. Please consult the Loan Documents you had signed when your loan was approved for important information on the rate of interest applied to your loan and the cost of borrowing over the term of your loan. |
| Loan Documents Package | These documents are emailed to you once your loan is approved. The Documents must be reviewed and signed by you and the originating Loan Manager before any funds can be disbursed. This package will include your responsibilities as a borrower and Windmill's responsibilities as a lender. It will also detail the interest rate calculated on your loan and the cost of borrowing the amount for which you were approved. |
| NSF (Non-Sufficient Funds) | An error reported by a banking institution if a pre-authorized payment fails. This type of failure is the result of not enough funds present in the account at the time the pre-authorized payment is scheduled. A failed payment is then considered an overdue payment (or delinquent - see above). |
| Online Payment | If you are a member of a bank or credit union, you will be able to make deposits to either business accounts or individuals using an existing software, usually online. You can send a disbursement to Windmill using your bank's online payment system. |
| Pay in Full Early | When the total principal plus interest (if applicable) is paid before the scheduled maturity date of the loan. Windmill does not charge any penalties for paying the loan early. |
| PAP (Pre-Authorized Payments) | Instead of sending a monthly payment, a company can withdraw funds from your bank account. Windmill requires all clients to provide a bank account - in the client's name - to process the monthly payments. |
| Prime Rate | It is an interest rate used by bank, usually the interest rate at which banks lend to customers with good credit. If a variable interest rate product, the interest rate may be expressed as a percentage above or below prime rate. Windmill loans (where applicable) calculate the interest rate as the RBC prime rate plus 1.5%. Learn more about prime rates here. |
| Principal | The original sum of money borrowed. A principal payment is the scheduled payment amount, to repay a portion of the outstanding balance, without interest. |
| Principal + Interest | The original sum or money borrowed plus the interest calculated based on the term length of the loan. A principal + interest payment is the scheduled payment amount, to repay a portion of the outstanding balance, with interest. |
| Repaid | Once the entire outstanding balance of the loan has been paid in full, the status of the loan will be 'Repaid'. Windmill will report to Equifax the account is Repaid in the reporting period following the date of full repayment. |
| Repayment Schedule | See Amortization Schedule, above. |
| Restructure | A method of debt reorganization, when a borrower can no longer commit to the original terms of their loan. A restructure will typically lengthen the due date of the principal payment on the loan or modify the frequency of interest-only payments. A loan may be restructured to shorten the term length, if for example, a borrower wishes to 'speed up' the repayment of their loan. |
| Variable Interest Rate | It is the interest rate on a loan that will float, or fluctuate, based on the underlying benchmark interest rate for that product. Windmill loans (where applicable) are variable interest rate products. If the RBC prime rate is adjusted, either up or down, Windmill will adjust the affected loan products accordingly. |
| Void Cheque | It is a cheque that cannot be deposited as 'void' is clearly written across the face of a cheque. A void cheque is provided to a borrower to set up direct deposit. Windmill requests a copy of a void cheque or Direct Deposit Form to initiate loan payments and disbursements. |