A guide to many terms in the consumer finance market.
Acceptance rate from
– Percentage of customers who have applied for a loan or credit card. Applicants must be offered an advertising rate of 66% or more, the usual APR [see "Typical APR" below].
Annual percentage ratio [APR] from
– The interest rate payable on the loan or credit card balance each year. This allows potential customers to compare lenders. According to the Consumer Credit Act, the law requires lenders to disclose their annual interest rates.
– Missed loans, credit cards, mortgages or most debt payments are called arrears. The borrower is legally binding and has an obligation to settle any arrears as soon as possible.
Arrangement fee from
– Usually used to set the administrative fee for the mortgage.
Basic rate from
– The interest rate set by the Bank of England. This is the interest rate charged by banks that are loaned to the Bank of England. The basic interest rate and its future changes directly affect the interest rates that banks may charge consumers through loans or mortgages.
Commercial loans from
– Loans specifically for businesses, usually based on the company's past and future performance.
car loan from
– A loan dedicated to car purchases.
Consumer Credit Association [CCA] from
– Represents most companies in the consumer credit industry. Governments, local authorities, financial institutions, financial media and consumer groups are all members. Members must abide by the code of conduct and business conduct when signing the constitution.
County Court Judgment [CCJ] from
– The county court may issue a CCJ to an individual who fails to resolve the outstanding debt. CCJ will adversely affect an individual's credit history and may result in their rejection of credit. CCJ will retain a 6-year credit history. By fully resolving the CCJ within one month of receipt of the CCJ, this major negative stain on the credit history can be avoided, in which case the CCJ details will not be stored in your credit history.
Credit crunch from
– Lenders usually reduce the amount of loans at the same time. Usually, people are worried that the borrower will not be able to pay off the debt.
Credit file from
– Information about personal credit and loan arrangements stored by credit counseling agencies [eg Experian, Equifax and CallCredit]. When the lender considers the credit application, the credit document will be checked.
Credit counseling agency from
– Retain personal credit and loan arrangements, the amount owed, with whom and the payment record of the company, including any default, CCJ, arrears, etc.
Credit search from
– General search by lenders and credit counseling agencies.
Debt consolidation from
– Convert multiple debts into a single debt by loan or credit card.
– If there is no regular repayment of debt. Defaults will be recorded on the personal credit history and will adversely affect the chances of any subsequent credit application success.
Data protection law from
– A parliamentary bill of 1998 and the main legislation governing the use of personal data in the UK. The lender is not allowed to share personal personal data directly with other institutions or companies.
Early redemption fee from
– The fee charged by the lender if the borrower pays off the debt before the time limit agreed upon in the debt.
– The value of the property exceeds any loans, mortgages or other debts it holds. The individual sells his property and repays the amount of the debt owed by the property in full.
Financial Conduct Authority [FCA] from
– A government-designated agency responsible for regulating financial markets.
First charge from
– Property mortgage. Lenders who have a first charge on the property will give priority to repaying the mortgage or loan from the funds available after the sale of the property.
Fixed interest rate from
– The interest rate will not change.
Homeowner loan from
– Also known as a secured loan. Homeowner loans are only available to individuals who own their own homes. The loan will be secured by the value of the property, usually in the form of a second fee for the property.
Installment loan from
– Multiple repayment periods. Depending on the lender, they may be more flexible in terms of repayment amount and schedule.
Joint application from
– Loans or other credit applications from couples rather than singles [such as couples].
– A company that provides loans or mortgages.
Loan purpose from
– The purpose of obtaining a loan.
Loan term from
– The time limit for repaying the loan.
Value loan [LTV] from
– Usually associated with a mortgage and in percentage form. This is the amount of the loan related to the full value of the property. For example, a 90% LTV mortgage loan worth £100,000 may be offered to an individual. In this case, the offer is £90,000.
Monthly repayment from
– Loan monthly repayment, including any interest.
– In most cases, a loan specifically for the purchase of a property. This property is a guarantee provided to the lender.
Online loan from
– Although most loans are available online. The Internet allows the development of technologies that process loan applications faster than traditional methods. In some cases, the funds shown in the loan application, agreement, and account may only take 15 minutes or less.
Payday loan from
– Short-term cash advances of up to 31 days, which can be repaid on the next payday. Due to the short term of the loan, the APR of the payday loan is higher.
Payment Protection Insurance [PPI] from
– If the borrower is unable to maintain its repayment due to various reasons [including layoffs, illness or accident], the insurance is used to repay the debt.
personal loan from
– A general loan for various purposes that can be provided to individuals based on their personal credit history.
Risk price from
– Lenders can now choose a range of interest rates based on their personal credit score. Individuals with poor credit scores are considered high-risk individuals, and because lenders may default on repayments, they are likely to receive higher interest rates. Conversely, individuals with higher credit scores and good credit history are considered to be low risk and will receive lower interest rates.
Eligibility criteria from
– Eligibility requirements requested by the lender. The most basic criteria for qualifying for a loan in the UK are: UK permanent residency and fixed income of 18 years of age or older. Many lenders may also include additional loan terms.
– Finance 'Products' Supervised by the Financial Conduct Authority [FCA]. The lender must abide by the Code of Conduct and the individual is protected by the Financial Services Compensation Plan [FSCS].
Repayment schedule from
– Details of the term of the loan repayment and the amount of the repayment.
Secondary charging from
– A second loan secured by personal property, among other loans.
– Also known as homeowner loans. Mortgage loans are only available to homeowners. The loan amount is secured by the value of the property. If you are unable to maintain repayment, the money lender has the right to take back your property.
Shared ownership from
– An agreement in which an individual has only part of the property. The remaining percentage is owned by a third party [usually a housing association]. An individual may have a mortgage on the property he owns and own a rent of property that he does not own.
Total amount payable from
– Total loan plus interest and any applicable fees.
Typical annual interest rate from
– At least the advertising rate offered by 66% of successful loan applicants.
– The process of verifying data and approving loans.
– Not regulated by the Financial Conduct Authority [FCA].
Unsecured loan from
– Loans that are not mortgaged and are offered in good faith. Under the lender's belief, you can repay the loan based on factors such as your credit score, credit history and financial status.
Variable interest rate from
– The interest rate that will change during the loan repayment period.