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Glossary of loan terms:
The glossary below will help you understand commonly used financial words and phrases.
Please select a word or term you wish explained
- APR
- Assurance - Life
- Assurance - Level Term
- Cashback
- CCJ
- IFA
- Insurance Term
- Lender
- Loan - Secured
- Loan - Unsecured
- Rate - Capped
- Representatives
- Security Address
- Status
- Term
- Underwriting
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.
A specific type of life insurance policy that can be linked with a mortgage or loan. A percentage of the premium goes toward insuring your life, and would pay off the loan in the event of your death. The rest is invested and would pay you a lump sum at the end of the term.
Life assurance that pays out a lump sum if you should die during the term. This is suitable for interest only loans as the amount owed on the loan remains the same throughout the period of the loan.
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.
County Court Judgement. A court order against a debtor to pay money owed.
Independent Financial Advisor.
A life insurance policy that is often linked with a mortgage or loan. The premium goes towards insuring your life, and will pay off the loan in the event of your death.
The actual company that provides the finance to meet with a request for a loan or mortgage.
The equity in the property is used as security against the loan not being repaid.
The credit rating or financial position of the applicant is such that no security for the loan is required.
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.
Local representatives (Reps) who are available, if required, to pay home visits to give help and advice in the completion of loan applications.
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.
The credit-worthiness or otherwise of a potential borrower.
Period of a loan expressed in months or years.
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.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
- Most customers pay 12.2%APR typical variable or less.
- Rates from 8.9% APR variable to 17.2% APR variable our highest rate is for customers with severe credit problems.
A broker fee between 0% and 12.5% may be charged. On average this amount is £871.
Freedom Finance Plc, Freedom House, Church Street, Wilmslow, Cheshire, SK9 1AX.Freedom Finance Plc registered in England and Wales (company number 1780977).
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