A personal installment loan where repayment is automatically deducted from the borrower's paycheck or retirement income before it reaches their bank account. BMG Money's primary product. The allotment mechanism virtually eliminates missed payments, allowing lenders to offer loans to borrowers with poor or no credit history. See also: Payroll Deduction Loan.
Payroll Deduction Loan
A loan whose repayment is deducted directly from the borrower's paycheck by their employer, before the net pay is deposited to the employee's bank account. Functionally identical to an allotment loan. Used by BMG Money's LoansAtWork program for company employees. The employer processes the deduction through their payroll system.
Installment Loan
A loan repaid in regular, scheduled payments (installments) over a fixed period. Each payment covers a portion of the principal and interest. BMG Money loans are installment loans with terms of 6 to 60 months. Contrast with a payday loan, which requires a single balloon repayment.
Personal Loan
An unsecured loan made to an individual for personal use — not tied to a specific purchase (like a car loan or mortgage). BMG Money allotment loans are personal loans. They are unsecured (no collateral required) and can be used for any purpose: medical bills, car repairs, home improvements, debt consolidation, or any other personal financial need.
Payday Loan
A short-term, high-cost loan typically due in full on the borrower's next payday (2–4 weeks). APRs typically range from 300% to 400%+. The CFPB reports that 80%+ of payday loans are rolled over within 14 days, trapping borrowers in a cycle of debt. BMG Money is specifically designed as a better alternative to payday loans for federal employees and partner-employer workers.
Unsecured Loan
A loan that does not require collateral (an asset pledged against the loan). BMG Money loans are unsecured — you don't put up your car, home, or any other asset as security. If you default, the lender cannot directly seize your property (though they can pursue legal collection). Most personal loans, credit cards, and student loans are unsecured.
Rates & Costs
APR (Annual Percentage Rate)
The yearly cost of borrowing money, expressed as a percentage. APR includes the interest rate plus any fees, calculated on an annualized basis. Federal law (Truth in Lending Act / TILA) requires lenders to disclose APR before you sign. BMG Money's APR ranges from 19.99% to 35.99%. A higher APR means you pay more over the life of the loan. Always compare APRs when shopping for loans.
Interest Rate
The percentage of the outstanding loan balance charged as interest per period (usually annually). Unlike APR, the interest rate does not include fees. For most BMG Money loans, the interest rate and APR are similar because BMG Money does not charge origination fees. Interest accrues daily on the outstanding balance; each payment reduces the balance, which reduces future interest charges.
Origination Fee
A one-time fee charged by some lenders when processing a new loan, typically deducted from the loan proceeds. Example: a $5,000 loan with a 4% origination fee would net you only $4,800. BMG Money does NOT charge an origination fee — you receive the full loan amount. Some competitors like Avant charge up to 4.75%, which effectively increases your true borrowing cost above the stated APR.
Prepayment Penalty
A fee charged by some lenders when a borrower repays a loan before its scheduled maturity date. BMG Money does NOT charge a prepayment penalty. You can pay off your BMG Money loan at any time without additional cost — and early payoff saves on interest. Always verify whether a lender charges prepayment penalties before signing.
Amortization
The process of paying off a loan over time through regular payments, with each payment split between principal reduction and interest. In the early months, more of your payment goes to interest; in later months, more goes to principal. An amortization schedule shows every payment's breakdown across the full loan term. BMG Money provides a full amortization schedule at closing. Use the loan calculator to see yours.
Principal
The original amount borrowed, not counting interest. When you take out a $3,000 BMG Money loan, $3,000 is your principal. As you make payments, the portion applied to principal reduces your outstanding balance. The remaining outstanding principal is what future interest is calculated on. Early payoff eliminates interest on the unpaid principal.
Repayment Terms
Allotment
In the context of federal employment, an allotment is an automatic, recurring directive to route a portion of an employee's gross pay to a specified recipient before the net pay is deposited to the employee's personal account. Federal employees use allotments for savings, insurance, union dues, charitable contributions, and — through BMG Money — loan repayments. The federal allotment system is managed by the National Finance Center (NFC) and other federal payroll processors.
ACH (Automated Clearing House)
The electronic network used by US banks to process direct deposits and direct debits. When BMG Money deposits your loan funds to your bank account, this is done via ACH. When you make a manual payment via bank transfer, this is also via ACH. ACH transfers typically take 1–3 business days, though instant ACH is available for qualifying bank accounts. BMG Money supports instant ACH for loan disbursements.
Default
The failure to repay a loan according to the agreed terms. For BMG Money loans, default is extremely rare due to automatic payroll deduction — the primary risk is when an employee leaves their job and fails to set up alternative payments. A defaulted loan is typically sent to a collections agency and negatively impacts credit bureau records. BMG Money reports payment history to credit bureaus.
Forbearance
A temporary pause or reduction in loan payments, granted by a lender during financial hardship. Unlike deferment (where interest may not accrue), interest typically continues to accrue during forbearance. BMG Money may offer forbearance in specific circumstances — contact their customer service to discuss. Federal employees facing government shutdowns should contact BMG Money proactively to discuss temporary payment adjustments.
Loan Term
The length of time over which a loan is scheduled to be repaid. BMG Money offers terms of 6, 12, 24, 36, 48, and 60 months. Longer terms mean lower monthly payments but more total interest paid. Shorter terms mean higher payments but less total interest. Use the BMG Money loan calculator to compare total costs across different terms before choosing.
Credit Terms
FICO Score
The most widely used credit scoring model in the United States, developed by Fair Isaac Corporation. FICO scores range from 300 (poor) to 850 (exceptional). Most traditional lenders use FICO scores to determine loan eligibility and interest rates. BMG Money does NOT use FICO scores — approval is based on employment status and income, making BMG Money accessible to borrowers with any FICO score, including those with no score at all.
Alternative Credit Scoring
Credit assessment methods that use data sources outside the traditional FICO credit file, such as employment history, income stability, rental payment history, utility payments, and bank account behavior. BMG Money uses alternative credit data — specifically employment verification and income capacity — rather than FICO scores. This allows them to extend credit to the approximately 45 million Americans with thin or no traditional credit files.
Hard Credit Pull (Hard Inquiry)
A formal credit check by a lender that appears on your credit report and temporarily reduces your FICO score by a few points. Hard pulls occur when you formally apply for credit (mortgage, auto loan, credit card). BMG Money does NOT perform a hard pull — applying for a BMG Money loan will NOT appear on your credit report as a hard inquiry and will NOT affect your FICO score.
Soft Credit Pull
A credit check that does NOT affect your credit score and does not appear as an inquiry on your credit report. Soft pulls are used for pre-qualification checks, background checks, and identity verification. When BMG Money verifies your identity and employment during the application process, any credit data accessed is treated as a soft inquiry.
Debt-to-Income Ratio (DTI)
The percentage of your gross monthly income that goes toward paying debts. Calculated by dividing total monthly debt payments by gross monthly income. For BMG Money specifically, the relevant calculation is based on your disposable income (income remaining after all existing payroll deductions) versus the new loan payment. BMG Money will not approve a loan that exceeds your remaining payroll deduction capacity.
Federal Employment Terms
FERS (Federal Employees Retirement System)
The retirement system covering most federal civilian employees hired after January 1, 1984. FERS provides three layers of retirement income: a basic annuity (defined benefit pension), Social Security, and the Thrift Savings Plan (TSP, a defined contribution plan). FERS employees are eligible for BMG Money LoansForFeds loans both while employed and in retirement when receiving their FERS annuity.
CSRS (Civil Service Retirement System)
The older federal retirement system covering employees hired before 1984. CSRS provides a more generous defined benefit pension than FERS but does not include Social Security or an employer TSP match. CSRS retirees receive a larger annuity. Both current CSRS employees and CSRS retirees are eligible for BMG Money LoansForFeds loans. Source: OPM.gov.
LoansForFeds
BMG Money's dedicated allotment loan program for US federal government employees and qualifying retirees. Covers virtually all executive branch civilian agencies, USPS, DoD civilians, VA employees, and more. Loans are repaid through the federal government's payroll allotment system. No FICO credit score is required. Available in 33+ states and Washington DC. See the Federal Employees page for full details.
LoansAtWork
BMG Money's payroll deduction loan program for employees of private-sector companies, nonprofits, school districts, hospital systems, and other non-federal organizations that have partnered with BMG Money. Repayment occurs through the employer's payroll system. Requires the employer to be a registered BMG Money partner. See the Employer Search to check your company.
GS Pay Scale (General Schedule)
The pay scale used for most civilian federal government employees, ranging from GS-1 (entry level) to GS-15 (senior). Each grade has 10 steps. Pay varies by grade, step, and locality (geographic area). BMG Money does not use GS pay grade as an eligibility criterion — any GS employee with sufficient disposable income may qualify for a loan.
OPM (Office of Personnel Management)
The federal agency that manages the civilian workforce of the executive branch, including human resources, benefits administration, and retirement. OPM administers FERS and CSRS retirement payments. Federal retirees receive their annuity through OPM — BMG Money can set up allotment deductions from OPM annuities for qualifying retirees. OPM.gov.
TSP (Thrift Savings Plan)
The retirement savings plan for federal employees, functionally similar to a 401(k). TSP contributions are deducted from federal pay as payroll allotments. This is an existing allotment that BMG Money underwriting takes into account when calculating your disposable income for loan qualification — the more you contribute to TSP, the less disposable income available for a loan payment.
Legal & Regulatory Terms
TILA (Truth in Lending Act)
Federal law requiring lenders to clearly disclose credit terms — including APR, total finance charge, total amount financed, and total of payments — before a borrower signs a loan agreement. BMG Money complies with TILA. Your loan disclosure document will include all required TILA disclosures. This law is why lenders must show you the APR before you sign.
CFPB (Consumer Financial Protection Bureau)
The federal agency responsible for protecting consumers in the financial marketplace. The CFPB supervises lenders, enforces consumer financial laws, and publishes consumer education resources. WebBank (BMG Money's banking partner) and BMG Money's lending practices are subject to CFPB oversight. Source: consumerfinance.gov.
Promissory Note
The legal document that constitutes your loan agreement — your written promise to repay the loan according to the stated terms (amount, APR, payment schedule, late fees, etc.). When you e-sign your BMG Money loan agreement, you are signing a promissory note. Keep a copy for your records. Your promissory note will detail all terms, including what happens in case of missed payments.
FDIC (Federal Deposit Insurance Corporation)
The federal agency that insures bank deposits up to $250,000 per depositor per institution. BMG Money's banking partner WebBank is FDIC-insured, which means deposits at WebBank are federally protected. This status subjects WebBank to federal banking supervision and regulation, providing an additional layer of oversight over BMG Money's lending practices. FDIC.gov.
BBB (Better Business Bureau)
A non-profit organization that rates businesses on their trustworthiness and responsiveness to consumer complaints, using a scale from A+ (highest) to F (lowest). BMG Money has maintained BBB A+ accreditation since 2009. This rating reflects BMG Money's consistent track record of responding to and resolving consumer complaints and adhering to BBB standards of business conduct. BBB.org.
Note: This glossary is for educational purposes. Definitions may vary by context and jurisdiction. For legal or financial advice specific to your situation, consult a licensed professional. Last updated: May 19, 2026.
Ready to Apply? No FICO Check Required
$500–$12,000 for federal employees and retirees. Automatic payroll repayment.
What is the difference between APR and interest rate? +
The interest rate is the base cost of borrowing expressed as a percentage of the principal per year. APR (Annual Percentage Rate) is broader — it includes the interest rate plus any fees associated with the loan. For BMG Money loans, which charge no origination fee, the APR and interest rate are the same number. For loans with origination fees (like some personal loans), the APR will always be higher than the stated interest rate.
What does "allotment" mean in the context of federal employee loans? +
An allotment is an official instruction to the federal government's payroll system to automatically send a fixed amount from your paycheck to a specific destination — in this case, to your lender. The allotment system is the same one federal employees use for TSP contributions, union dues, and health insurance premiums. BMG Money's LoansForFeds product uses this allotment system to process loan repayments automatically each pay period.
What is FERS and why does it matter for BMG Money eligibility? +
FERS (Federal Employees Retirement System) is the retirement plan covering most federal civilian employees hired after 1983. BMG Money uses FERS participation as an eligibility indicator because FERS enrollment confirms permanent federal employment status and provides a payroll structure compatible with allotment deductions. FERS retirees also qualify for BMG Money loans, with allotments deducted from their OPM pension payments instead of an active paycheck.
How does debt-to-income ratio affect my BMG Money application? +
BMG Money evaluates your disposable income — what remains after taxes, existing deductions, and the proposed new loan payment — to ensure you have enough to cover basic living expenses. While they do not publish a specific DTI cutoff, the underwriting effectively sets one by verifying you have sufficient net take-home pay after adding the allotment. A high DTI (many existing deductions eating into your paycheck) can result in a lower approved loan amount or denial, even with stable employment.