Glossary
Annual Percentage Rate (APR)
APR or the Annual Percentage Rate is the interest rate charge
on your loan. This takes into account the interest payable
over the term of the loan as well as any other related
charges or fees.
Application Fee
Some banks may charge an application fee to process your
loan application. Paying this fee does not guarantee
you will be
approval, and will not be refunded should your application
be rejected.
Asset
An asset is any property with monetary value (i.e. real
estate, equipment, savings, investments).
Balance
This is the amount of money left in your bank account after
all deposits, withdrawals, interest and bank charges
have been accounted for.
Bad Credit
If you’ve defaulted on a loan or missed a credit card
payment you may be flagged as a bad credit risk by
financial companies. This makes it difficult to get approved
for
loans and often means you will pay more interest on any
loan you
are able to take out.
Cash Advance
This is an instant loan obtained from a credit card
account, with interest charged from the date of
the advance until
it is repaid. There may also be a transaction fee
based on the
amount of the advance.
Cheque
A written order to transfer money from a bank account.
County
Court Judgement (CCJ)
County Court Judgement is a judgement made against
a person or company for debt in the county
court. If a
CCJ is paid
in full within 30 days of the date of the judgement
it won’t
reflect in the credit register. CCJs are catalogued
and kept for 6 years with the Registry Trust.
Credit Check
This is done by a lender when you apply for
a loan. The result of a credit check will
help the lender
determine
how much
of a risk you are to loan money to and will
affect
amount you
can borrow and the interest rate you are
offered.
Credit Rating
This is an independent evaluation published
by a credit rating agency or service of
your ability
to
pay interest
and repay
principal on borrowed money.
Debt
A legal obligation to deliver a product,
service, or cash.
Deposit
The money you put into a bank account.
Equity
This is the value of your home minus
outstanding mortgage amounts and
other loans. Equity
can be converted into
cash through
companies willing to offer loans
secured against it.
Financial Statement
A written record provided by the
bank which details your financial
situation.
It often
includes a
record of all
the money you
have had come into you account,
and all the money you have paid out.
Income
The total amount of money you receive
from all sources, including wages,
bonuses, commissions, government
or retirement benefits,
compensation claims interest
and dividends on
all investments.
Net Income
The total amount of your income
after any expenses and taxes
you pay are
subtracted.
Overdrawn
You are considered overdrawn
on your account if you withdraw
more
money
than it currently
holds.
You
are likely to
incur some charge relating
to the amount you are overdrawn,
unless
there was a prior arrangement
with your bank.
Overdraft
This is an amount by which
your bank account can be
overdrawn. You will
be charged a
set fee for
the provision of an
overdraft facility, usually
calculated
as a fairly high percentage
of the total overdraft
value.
Variable Interest Rate
This type of rate varies
depending on changes
in a particular
measure or index.
Variable
interest rates in the
UK are computed from the Bank
of England
Base Rate. |
