Adverse credit (also known as bad credit, impaired credit or poor credit) refers to a credit rating which shows a history of missing payments, and may include defaults and County Court Judgements (CCJs).
Your application is the details you provide in order to apply for a loan. The information you provide will be used in order to find you a loan which best suits your circumstances
APR stands for Annual Percentage Rate and is used to describe the cost of borrowing money. All lenders calculate APR in the same way which allows you to compare different lending products.
Arrears are debts as a result of missed or late payments of a loan or other type of credit agreement. Falling into arrears can result in a poor or impaired credit history.
Please see adverse credit.
Bankruptcy is an option that can be considered if an individual cannot pay the debts that they owe. It is a legal process which can seriously harm your ability to obtain credit in the future.
The base rate is the interest rate set by the Bank of England for lending to other banks.
CCJ stands for County Court Judgement and is a ruling issued by a county court or higher court against a person who has not satisfied their debt payments with their creditors. CCJs appear on a credit file and can affect future loan applications.
This is the period after signing a contract during which you are entitled to cancel the purchase of a financial product.
See Debt Consolidation.
Credit can be unsecured. Unsecured credit includes unsecured loans, credit cards, store cards, overdrafts.
An institution, like a bank or finance company that grants loans or provides goods on the basis of hire purchase. There must be legal contract (Credit Agreement) between the borrower and the Creditor which sets out how and when the money is to be repaid. In the case of hire purchase it will grant the lender the right to claim back the asset if you fail to pay back the loan. See Lender.
A contract between you and a loan or finance provider which details the full terms and conditions and the total cost of your loan.
A check carried out by a lender to establish your credit worthiness. Arrears will be shown, along with details of your financial history, any adverse credit, electoral roll information and details of previous searches.
Your credit rating is a summary of the information found in your credit check.
A credit reference agency – also known as a credit bureau – is a company used by lenders and other authorised financial companies to carry out a credit check.
Money owed to a lender or other financial institution.
Paying off some or all of your debt with a loan in order to reduce your monthly payments.
A debt management plan is a repayment plan which helps make unsecured debt repayments more affordable. A debt management company will normally negotiate with creditors on your behalf to reduce your monthly and total payments to a manageable level.
A default is issued by a lender generally after the customer has missed 3 payments. A customer is always given the option to clear their arrears before an official default is registered with a credit reference agency.
The Financial Conduct Authority (FCA) is an independent organisation responsible for regulating financial services companies in the UK. The FCA has the power to take legal action against firms which fail to meet their standards.
Fees are sometimes charged by the broker or lender for completing your loan application.
The interest that you are charged on your secured loan will remain the same regardless of circumstances such as changes in the Bank of England base rate. Generally a lender will only offer a fixed rate for a specified period.
The total amount of money you take home each month before tax.
A customer who owns the freehold on a property.
An Independent Financial Advisor (IFA) is a qualified professional that can offer financial advice.
An IVA (Individual Voluntary Arrangement) is a formal alternative to bankruptcy. It is supervised by a Licensed Insolvency Practitioner and the purpose is to enable you to reach a compromise with creditors concerning the repayment of debts. Usually only unsecured debt can be included in the arrangement.
A person who owns a lease on a house, but does not own the freehold.
A company that provides an unsecured loan or a secured loan. Loan brokers work with a number (a panel) of lenders in order to find you the best deal. See Creditor.
Money borrowed from a lender. Loans are typically unsecured loans or secured loans.
A loan broker works with a number of lenders and fits your loan application to the one which will best suit your circumstances.
The reason why you wish to borrow money, e.g. a new car or debt consolidation.
Payments which have been missed on credit accounts, typically in the last 12 months.
Also known as credit insurance, credit protection insurance, or loan repayment insurance, is an insurance product that enables consumers to insure repayment of credit if the borrower dies, becomes ill or disabled, loses a job, or faces other circumstances that may prevent them from making a payment towards their credit.
Costs incurred if you decide to repay/settle a loan early. Some lenders will charge a fee if you wish to pay off your secured loan or unsecured loan early, in addition to a portion of the interest that you would have had to pay if you had not settled the loan early.
The amount that you pay back on your unsecured loan each month.
This allows you to confirm how much you earn – you do not then need to provide three years accounts if you are self employed.
A settlement figure can be calculated at any stage of a loan and is the amount required to be repaid to terminate the agreement.
Someone who rents or leases the home they live in, this includes those living with parents and those living in council or housing association accommodation.
The period over which you wish to repay your unsecured loan.
This is the total amount of money that will be repaid if the loan is paid over the normal term, this will include interest charged and any fees.
How a lender determines your ability to repay your debt.
A loan from a financial institution which is not secured on any asset.
Variable rate interest changes during the lifetime of a loan. The reasons for change are outlined in the loan agreements and are usually linked to the associated cost of borrowing for the lender (the base rate).