Jargon Buster

Adverse Credit

This is a generic term for someone who has a history of bad credit, for example a bankrupt, or someone who has defaulted on past payments.

APR

Simply put, this is the total amount of interest and other fees on a loan. It stands for Annual Percentage Rate. The calculation is set out in statutory regulations.

Arrears

If you have fallen behind on payments, you are said to be in arrears.

Bad Credit

If your credit rating suffers from bad credit, that means you have a history of activity such as missing payments, bankruptcy or something that makes you more of a risk for lenders.

Broker

Your broker is your intermediary, someone who sources the best loan for you that best matches your requirements,

Cashback

Cashback is good news - it's a sum of money you will receive for taking out a loan.

CCJ (County Court Judgement)

This is a court order against someone demanding they pay money they owe. It often involves additional charges related to the process of issuing the CCJ above and beyond the actual money they owe.

Credit Agreement

This is the outline agreement between you and the lender, including terms and conditions.

Credit Reference Agency

An organisation that checks up on the credit histories of borrowers and advises lenders whether they should go ahead with the loan or not.

Credit Score

The overall score given to a loan applicant after searches by Credit Reference Agencies have taken place.

Fixed Interest Rate

An interest rate payable on a loan that remains the same for an agreed time period.

Over-repayments

When payments are higher than or more frequent than detailed in your credit agreement.

Payment Protection

This is an insurance plan you can take which covers your loan repayments for you if you become ill or lose your job.

Secured Loan

A loan where the borrower's property is used as security on the loan.

Self-certification

This is where you can state your level of income without having to prove it.

Term

This is the time between the beginning of the loan according to your agreement, and the final date by which the full balance must be paid.

Under-repayments

This is when the payments being made are below the level in your agreement. This is often something agreed between the lender and borrower as long as the borrower has made a clear commitment to get back on an even keel within an agree timeframe.

Underwriting

This is the decision made by the lender whether to approve a loan.

Unsecured loan

This is a loan that doesn't require the borrower using their house as security.

Variable Interest Rate

This is where the rate charged on the loan follows movements in the market which in turn are influenced the Bank Of England's policy.