Creditor

Creditor summary:

  • Creditors extend loans to borrowers, which are then repaid (often via a series of monthly payments).

  • Creditors earn money on borrowing by charging interest. 

  • Creditors decide whether to lend to a given consumer by evaluating their credit history. 

Creditor definition and meaning

A creditor may be a person or institution to whom money is owed. Creditors may include:

  • Banks

  • Credit unions

  • Credit card companies

  • Loan companies

  • Businesses

  • Individuals

A creditor loans money or extends credit and expects you to repay what you borrow, typically with interest. If you have a mortgage, your mortgage lender is the creditor. If you owe money on a car, the bank, credit union, or finance company that loaned the money is the creditor. If you have a credit card, the credit card company is the creditor. 

Key concept:

A creditor is a business or individual that loans you money with the expectation that you'll repay the loan as agreed. Often, payments are made in monthly installments. 

More about creditor

Creditors play an essential role in our economy by providing money to consumers so they can purchase the things they need. For example, without mortgage lenders, it would be nearly impossible for the average American to buy a home. Many of us depend on a lender to finance our vehicles. Without creditors, there would be no such thing as a traditional credit card. 

Creditor: a comprehensive breakdown 

Before extending credit, lenders judge a consumer's creditworthiness by relying on their credit score. Lenders may also consider other factors, including work history, income, and whether the loan is secured (with collateral) or unsecured. 

A creditor's goal is to earn interest on the money it loans. But for that to happen, the borrower must repay the loan as agreed. 

What happens if you don't pay as agreed? Creditors have the right to seek payment from you. Even so, there’s a law called the Fair Debt Collection Practices Act that protects you. Creditors may not:

  • Harrass you. This includes using obscene language, threatening to hurt you, or calling more than seven times within seven days.

  • Lie to you. For example, a creditor can't tell you that you owe a different amount than is owed or pretend to be an attorney. Creditors also can't tell you that you'll be arrested or say they're going to take legal action against you (unless it's true). 

  • Treat you unfairly. Unless the original contract or law says they can, a creditor can't try to collect fees, interest, or other charges on top of the amount owed. Creditors can't deposit a post-dated check early and can't reveal your debts in public. 

You have the right to make debt collectors leave you alone. But asking them to stop contacting you won’t make the debt go away.

PERSONAL LOANS

Consolidate debt with a personal(ized) loan

Simplify your life—consolidate your debts into one fixed monthly payment.

Related Articles

fdcpa-ach.jpg

There's nothing pleasant about being contacted by a debt collector, but you have rights. Learn how the FDCPA protects you from debt collector abuse.

how-can-you-make-debt-collectors-leave-you-alone.jpg

When debt collectors won't stop calling, writing a cease-and-desist letter is one way to get them off your back. Learn more here.

Personal loans are available through our affiliate Achieve Personal Loans (NMLS ID #227977), originated by Cross River Bank, a New Jersey State Chartered Commercial Bank, Equal Housing Lender. Loan applications are subject to credit review, underwriting criteria, and approval. Loans are not available in all states and available loan terms/fees may vary by state. Loan amounts range from $5,000 to $50,000. For loans $35,000+ must have a minimum 660 credit score. APRs range from 8.99% to 29.99% and include applicable origination fees that vary from 1.99% to 8.99%. Repayment periods range from 24 to 60 months. Example loan: four-year $20,000 loan with an origination fee of 8.99%, a rate of 15.49%, and corresponding APR of 20.77%, would have an estimated monthly payment of $561.60 and a total cost of $26,966.26. To qualify for a 8.99% APR loan, a borrower will need excellent credit, a loan amount less than $12,000.00, and a term of 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to pay off qualifying existing debt directly; or showing proof of sufficient retirement savings, could help you also qualify for lower rates. Loan Consultants for Achieve Personal Loans are available Monday-Friday 6 AM to 8 PM AZ time, and Saturday-Sunday 7 AM to 5 PM AZ time.

Home Equity loans are available through our affiliate Achieve Loans (NMLS ID #1810501). Equal Housing Opportunity. Offers may vary and all loan requests are subject to eligibility requirements, application review, loan amount, loan term, income verification, and lender approval. Product terms are subject to change at any time. Offers are a line of credit. Loans are not available to residents of all states and available loan terms/fees may vary by state where offered. Line amounts are between $15,000 and $300,000 and are assigned based on product type, debt-to-income ratio and combined loan-to-value ratio. 10, 15, 20, and 30-year terms available. Minimum 600 credit score applies for debt consolidation requests (20 and 30 year terms require a minimum credit score of 640), minimum 700 applies for cash out requests. Other terms, conditions and restrictions apply. Fixed rate APRs range from 6.74% - 14.75% and are assigned based on underwriting requirements and offer APRs assume automatic payment enrollment which may provide a discount (autopay enrollment is not a condition of loan approval). All terms have a 5-year draw period with the remaining term being a no draw period. Payments are fully amortized during each period and determined on the outstanding principal balance each month. Closing fees range from $750 to $6,685, depending on line amount and state law requirements and typically include origination (3.5% of line amount) and underwriting ($725) fees if allowed by law. Property must be owner-occupied. Combined loan-to-value ratio may not exceed 80% (20 and 30 year debt consolidation requests may not exceed 75%), including the new loan request. Property insurance is required and flood insurance may be required if the subject property is located in a flood zone. You must pledge your home as collateral. Loan funding time is dependent on full application and documentation submission, average funding time is 11 business days for 2025, including rescission. Monthly/yearly savings claim is based on average monthly debt savings from originated loans for Q4 2024. Monthly/yearly savings varies based on each loan situation and can be more or less than $800/$10,000. Requirements to obtain 6.74% APR include: debt to income ratio <=15%; cumulative loan to value <= 50%, including new request; loan amount between $15,000 and $150,000; term of 10 years; FICO of 800+; and automatic payment enrollment. Contact Achieve Loans for further details

Affiliated Business Arrangement Disclosure: Achieve.com (NMLS #138464) and Achieve Loans are both wholly owned subsidiaries of Achieve Company. Because of this relationship, your referral to Achieve Loans may provide Achieve.com a financial or other benefit. Where permitted by applicable state law, Achieve Loans charges: 1) an origination fee of 3.50%, and 2) an underwriting fee of $725. You are NOT required to use Achieve Loans for a home equity line of credit. Please click here for the full Affiliated Business Arrangement disclosure form. Please click here for the full Affiliated Business Arrangement disclosure form.

Resolution is available through our affiliate Achieve Resolution (NMLS ID # 1248929). All estimates for Achieve Resolution’s services are based on prior results, which will vary depending on your specific enrolled creditors and your individual program terms. Not all Achieve Resolution clients are able to complete their program for various reasons, including their ability to save sufficient funds. Achieve Resolution does not guarantee that your debts will be resolved for a specific amount or percentage or within a specific period of time. Achieve Resolution does not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Achieve Resolution’s services are not available in all states, including New Jersey, and their fees may vary from state to state. Please contact a tax professional to discuss potential tax consequences of less than full balance debt resolution. Read and understand all program materials prior to enrollment. The use of Achieve Resolution services will likely adversely affect your creditworthiness, may result in you being subject to collections or being sued by creditors or collectors and may increase the outstanding balances of your enrolled accounts due to the accrual of fees and interest. However, negotiated settlements Achieve Resolution obtained on your behalf resolve the entire account, including all accrued fees and interest. C.P.D. Reg. No. T.S.12-03825.

© 2025 Achieve.com. All rights reserved. NMLS #138464