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.
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