Alphabetical loans glossary
ACCESS - This term is mostly used to describe the terms by which an individual or company can withdraw the money that they have placed into a financial product. So, if you have a current or business bank account, for example, then you will generally be able to access your money as and when you like whilst you have the agreed funds available. Once funds are depleted you have no access, unless you have agreed an overdraft.
ACTUARY - This is a mathematician working in the finance sector who performs risk assessment and analysis for the setting of rates of interest, mainly in insurance but also in the lending market.
ADDITIONAL LOAN SECURITY - When your borrowing exceeds a certain predetermined level, you may need to use an additional security, like a second property or land of value. Some lenders except different commodities like a cash down payment or stocks or shares.
ADMINISTRATION FEE - This is a charge accrued for setting up a loan from a lender. Brokers make this charge upfront, whilst banks and building societies bolt it on after the money has been advanced.
ADVERSE CREDIT - This is what a person can suffer from when not keeping up with any outstanding debts they currently have. Things that also come into the equation are negative items such as been discharged bankrupt (IVA), County Court Judgements (CCJ's), missing repayments on outstanding borrowing or having to much debt as you stand. You are still able to get credit through certain channels; however an actuary will adjust the
amount of interest accordingly.
A.E.R. (Annual Equivalent Rate) - The Annual Equivalent Rate is the figure that helps with comparisons of one financial product with another, and is generally quoted on interest paid on savings and investments. It shows what the rate would be if interest was paid just once a year.
AGREEMENT IN PRINCIPLE - An arrangement that a lender may make with a consumer before they formally take out a loans product. This kind of arrangement is most often seen within the mortgage sector. If you're looking to take out a mortgage then it can be difficult to know how much you can afford to spend on a property before you make your mortgage application. An agreement in principle will give you the relevant information you
need and an informal commitment from the lender in question to allow you to borrow the money.
ALLOWANCES - These are concessions from the Inland Revenue which can be used to reduce your taxable income. Your Personal allowance is an amount of income that is tax free. Personal allowances for 2005 - 2006: under 65yrs: - £4,895; 65yrs-74yrs: - £7,090; from 75yrs: - £7,220
APPLICATION FORM - This form will need to be completed, providing personal details, before a new account, credit card or loan can be agreed.
ANNUAL PERCENTAGE RATE (APR) - Every company whose business is lending money or advancing credit is required by an act of parliament to quote this rate. It will be only one of a number of interest rates you may see quoted. It is also most probably likely to be the highest of them all. Personal loans, credit cards, mortgages and overdrafts may all be quoted at introductory rates or offers of interest that sound enticingly cheap.
However, what those introductory rates and offers fail to include are any arrangement fees you may be charged for credit or loans and they also won't immediately reflect any higher rate of interest that your borrowings will ultimately revert to. This is where the APR comes in. It was introduced as part of the Consumer Credit Act of 1974. The headline quoted rate on loans and credit cards may be the rate of interest you pay per month or per year, but it's the APR figures (usually shown in brackets) which calculates
the total amount of interest that will be paid over the whole term of the loan. The APR should also take into account any other charges which the borrower has to pay. So, if you see a 'too good to be true' loan offer, fixed at a surprisingly low rate for a short period of time, ask yourself how much it could really cost by checking out the APR - it is more than probable to be amazingly substantially higher.
ARREARS - This describes a payment that has not been made or an amount of money that a borrower has fallen behind in paying. This term can apply to rent arrears, mortgage arrears, credit card repayment arrears etc. This affects your credit rating and makes obtaining any form of credit difficult.
BAD CREDIT - Bad credit is something that a person will have if they fail to make the required repayments to creditors.
BAD CREDIT HISTORY - A person will have if they have this if they have failed to make the required repayments to creditors in the past. Often items of credit that are registered as defaults or CCJ's can remain on your credit history for years. In the worst case scenario, it can lead you to being declared bankrupt.
BANKRUPTCY - A legal status for those who are not able to repay their debts. It can lead to you losing any landed property, estate or assets you may have, and can also lead to a conviction and prison.
BASE RATE - This is the lowest level of interest charged which is set by the Bank of England. It is currently 4.75% which was set in August 2004. If the base rate increases too quickly it has a direct impact on inflation.
BLACK LISTED - This means the person or company has a bad credit history and is on a list of bad debtors, which makes it very difficult to find a credit broker.
BRIDGING LOAN - This is a short-term loan to cover what will eventually be covered by long-term finance. Sometimes a Bridging-loan is required by purchaser of a property who hasn't yet sold their original house.
BROKERS - Brokers are intermediaries who arrange both secured and unsecured loans for applicants with various lenders. Brokers may have a panel of different lenders with which they can place the applicant's loan, or they may be tied to a particular lender. Quick and Easy are actual lenders, not brokers, we do not send your application to various lenders. We are able to keep your personal and private details in-house, saving
time and costs.
CASH - Another term for money, initially a slang term, now accredited as a viable word by the Oxford English Dictionary.
CASH ADVANCE - This is a payment given to you to tide you over until you receive a bigger payment that you are due to receive. Very much a short term loan, or to a degree, a bridging loan.
CONSUMER CREDIT ACT - The principal legislation covering the provision of loans to individuals. This has a value set at £15,000 so a loan can be set at £15,001 so it is not treated as a regulated loan.
COUNTY COURT JUDGEMENT (CCJ) - A judgement in a county or civil court to show that a debt is not being serviced or cleared. After a ruling, the debt has 30 days to be cleared so it doesn't show up on a credit report. If it is cleared after 30 days, it is on your credit report, but listed as satisfied.
CREDIT HISTORY - This is the history of how you have managed your finances over a certain period of time. This is kept up to date by Equifax and Experian.
CREDIT RATING - This is a score calculated on your credit history, again kept up to date by Experian and Equifax.
CREDIT REFERENCE AGENCY - Experian and Equifax
CREDIT REPORT - Your written report concerning your credit history.
DELINQUENT LOAN - A loan that has gone passed the point of missing a payment or two. This is when the lender will start to take affirmative action.
DIRECT DEBIT - A way of paying off incoming bills and debts without actually doing a manual transfer by visiting the bank itself. It is fully automated.
E-LOANS - Loans that can be arranged over the Internet
END BALANCE - The final balance after all transactions have been made.
FINANCE - Relating to do with anything to do with raising money or capital.
HIGH STREET LENDERS - Places like banks and building societies
INTEREST RATE - A percentage charge on money borrowed.
LOAN APPLICATION - A form to complete to apply for a loan
LOAN CALCULATOR - A tool to estimate how much you would pay back on certain loans at certain interest rates.
LOAN TO VALUE (LTV) - The actual amount borrowed after any deposits have been taken away.
MINIMUM PAYMENT - The very least you have to pay, usually set up monthly.
MONTHLY REPAYMENT - What you have to pay each and every month to clear your loan or financing
NO CREDIT HISTORY - Somebody who has never had anything on credit or at least no credit for the past five or seven years. This can also work against you obtaining finance.
NON STATUS - No proof of income
PERSONAL LOAN - A loan given to an individual for something like a car or kitchen installation.
QUOTATION - A legally binding document to say how much you can borrow, over what period of time and the interest charges.
REPAYMENT PERIOD - How long you have agreed to return the loan with interest.
SECURED LOAN - A loan that has been arranged with property as a deposit, or security. If you do not keep up your repayments you could lose your house.
SECURITY - A thing of value or asset.
VALUATION - A pricing of your property at current property prices.
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