Common terms & definitions

Annual Percentage Rate (APR)

This is the actual cost of borrowing of your loan, taking into account all associated fees and charges. The APR is the best way for most people to compare loans from different lenders.

Bad Credit

Bad Credit is a term used to describe the credit rating of a person with a history of loan defaults or credit card and mortgage arrears.

County Court Judgment (CCJ)

CCJ is the term for a judgment made in the county court against a person or company for debt, usually as the result of loan defaults.

Credit Check

This refers to a credit history check made by a finance provider with a credit reference agency such as Experian. Lenders use these to help assess your loan application.

Credit Reference Agency

A credit reference agency is a company that tracks your credit history.

Default

This is a term used when a person fails to meet their financial obligations, such as missing mortgage or loan repayments.

Equity

This refers to the difference between how much your property is currently valued and the amount of any existing debt taken against it.

Payment Protection

An optional insurance that covers loan repayments over a specified length of time, typically around one year. This applies to cases when the bearer is unable to meet payments due to an accident, injury or illness, or loss of employment.

Repayments

Monthly sums paid the lender in order to clear your debt.

Secured Loan

A loan, generally of high value, which requires a form of security or collateral.

Tenant Loan

Another name for an unsecured personal loan.

Unsecured Loan

A loan which requires no security. More difficult to get approval for because lenders consider them as a higher risk.