Loan Servicing Glossary of Terms

Terms you should know when getting a loan.

  • Loan term guidance
  • Financial knowledge for success

A better understanding of key loan terms

This separate policy covers payments on the loan it was purchased to protect, if the member becomes ill or injured.

This separate life insurance policy pays off a borrower's loan if the borrower dies.

When a borrower takes out a loan for a vehicle at a lending institution, he or she normally signs an agreement to maintain dual-interest insurance, protecting both the borrower and the lender with comprehensive and collision coverage on the vehicle throughout the life of the loan. The borrower provides proof of insurance to the lender. If proof of insurance is not received, notices are sent to borrowers prompting them to obtain required coverage. If responses to notices are not received, the lending institution may choose to have CPI coverage “force-placed” on the borrower’s loan to protect its interest from damage or loss.

In the context of mortgage loans, the financial institution establishes a separate escrow account to pay property tax and insurance during the term of the mortgage.

The Annual Escrow Account Disclosure Statement provides detailed information regarding your escrow account. Any changes in your escrow payment and the reason(s) will be disclosed in your analysis.

Supplemental insurance covers the owner of the vehicle when the vehicle is damaged beyond repair or stolen. It is designed to fill in the gap between what you owe and the actual value of the vehicle claimed by your insurance company.

This is a form of security interest granted over an item or property to secure payment of debt.

When a mortgage loan is paid in full, the mortgage is satisfied. The lender must then release its lien against the property within a reasonable time frame.

A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter. The person authorizing the other to act is the principal, grantor, or donor (of the power). The one authorized to act is the agent or attorney.

It is insurance to protect the lender in the event of borrower default. It is intended to offset losses in the case where a borrower is unable to repay the loan and the lender is unable to recover its costs after foreclosure and sale of the mortgaged property.

If you are refinancing your first mortgage and do not want to pay off your current second mortgage or pay off and close your Home Equity Line of Credit, you may request a subordination. Contact 7 17’s Real Estate Loan Department at 330-372-8120 for more information or assistance.

7 17 Credit Union provides banking services throughout Austintown, Boardman, Canfield, Canton, Cortland, Howland, Hubbard, Kent, Ravenna, Vienna, Warren, and Youngstown, OH. Bank with us today!