Jargon Buster
Need help understanding all those financial terms? Use the list below for some explanations.
APR
Annual Percentage Rate - The APR is a measure of the cost of credit, expressed as a yearly rate. This reflects the annual cost of the loan over the repayment period. The Annual Percentage Rate includes specific costs of financing, both those paid at the time of borrowing and those paid over the term of the loan.
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Cashback
Type of loan where the borrower is given back a sum of money (usually a percentage of the loan). Commonly used by lenders as an incentive to promote their products.
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CCJ
County Court Judgement. A court order against a debtor to pay money owed.
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IFA
Independent Financial Advisor.
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Lender
The actual company that provides the finance to meet with a request for a loan or mortgage.
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Loan - Secured
The equity in the property is used as security against the loan not being repaid.
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Loan - Unsecured
The credit rating or financial position of the applicant is such that no security for the loan is required.
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Rate - Capped
Usually a rate for a set number of months/years where the interest rate can go up and down but there is a maximum (capped) interest rate which it can not go above.
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Representatives
Local representatives (Reps) who are available, if required, to pay home visits to give help and advice in the completion of loan applications.
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Security Address
When taking a secured loan or mortgage, the security address is the address of the property which is being offered as collateral for the loan. Where property is offered as security in this way, lenders are generally prepared to offer more flexible terms and lower interest rates.
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Status
The credit-worthiness or otherwise of a potential borrower.
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Term
Period of a loan expressed in months or years.
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Underwriting
The process by which the ability of a prospective borrower to repay a loan is assessed (this is also the name of the department that undertakes this work). The process takes into account various factors including employment history, financial status, previous credit history and current earnings.
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