Common Terms & Definitions

/ Annual Percentage Rate (APR)
APR determines the actual cost of your loan; the figure is based on the interest payable for the term of the loan and also all other additional charges and fees. This makes it the best variable to consider when choosing between loan providers as this will give you an overall idea of how much more or less it will cost you to go with a particular lender compared to another.

/ Application Fee
Banks generally apply a fee to loan applications. However, this fee is only for processing the application and it does not guarantee your loan will be approved. Should your application be rejected, this fee will still normally be charged.

/ Asset
Any form of property that has a cash value (e.g. equipment, real estate) is considered as an asset.

/ Bankers Automated Clearing Service (BACS)
BACS, or Bankers Automated Clearing Service refers to a computerised system for transferring funds between banks after clearing.

/ Credit Check
A loan provider will conduct a credit check when processing a loan application. The results of the credit check determine whether or not the application for the loan will be approved.

/ Credit History
Businesses and individuals have a credit history which reflects how previous debts were settled. It records information as to whether payments were made late, and any instance of County Court Judgements.

/ Credit Rating
Credit rating is an objective evaluation of one’s capacity to pay interest and repay principal on a loan. This information is normally disclosed by a third party credit rating agency such as Experian to authorised inquiries.

/ Electronic Banking
Almost all banks and building societies provide their clients access to their business bank accounts through online electronic-based services that can be reached through a computer or a mobile phone.

/ Financial Statement
A financial statement provides a complete summary of the account holder’s financial transactions. In general, this is a record of deposits and payments made to the account, as well as details on every withdrawal made.