Arrangement fee – a fee to cover administration.
Arrears – money that was due to be paid but has not been paid. When you are behind in payments, you are in arrears.

Cash Advance – a short term advance, usually on your paycheck designed to help with immediate cash needs. Paid in full on the designated due date.

Credit card – allows you to borrow money to pay for goods and services without using cash or cheques.

Credit limit – the maximum amount of money that you may borrow.

Credit report – a document that list your credit history created and updated using information from Banks, Retailers and other sources, i.e. Courts.

Debit card – debit cards are basically plastic cheques. When you pay by debit card the money is taken directly from your bank account within a day or two of the transaction. There is no credit involved since your account is debited the same day you make a purchase. Details of purchases are shown on normal bank statements.

Default – occurs when a debtor has not met its legal obligations according to the debt contract, e.g. it has not made a scheduled payment, or has violated a loan covenant (condition) of the debt contract.

Debt – an amount of money that you owe to a person or company.

Direct Debit – an instruction from you to your bank or building society allowing someone to take money from your account. Direct Debits allow you to pay bills automatically from your account on a regular basis.

Debt Consolidation – sometimes referred to as loan consolidation, this simply represents the policy of borrowing on mortgage in order to repay other loans or debts.

Fixed-rate interest – an interest rate that stays the same throughout an agreed period.

Further advance – an additional loan made by the existing mortgage lender and secured by the first charge on the property. The Further Advance can be used for a variety of purposes (subject to the lender’s approval) such as home improvement, purchase of freehold or personal purposes, such as debt consolidation.

Gross – the whole amount before any deductions (such as tax or fees) are made.

Guarantor – a person other than the borrower who guarantees the mortgage repayments. A Guarantor can sometimes be used to support a borrower who has insufficient income to qualify for a mortgage in their own right.

Interest - the amount that you pay when you borrow money. It’s expressed as a percentage rate over a period of time.

Interest-free – no interest is charged on money that you borrow.

Interest rate – the rate at which you pay back interest, expressed as a percentage of the amount you borrow.

Loan – money that you borrow (e.g. to buy a new car) on condition that you pay it back.

Loan period – also called repayment period, this is the time it takes to pay back the loan. A shorter period means higher monthly payments (there are fewer months over which to spread them), but less interest paid in total on the loan.

Net – the amount after deductions (such as tax or fees) are made.

Net interest rate – the rate payable after the lower rate of income tax is deducted (NB the rate of tax may vary, so a net rate is usually only given as an example).

Overdraft – a facility (usually at a bank or other financial institution) enabling an account holder to borrow up to an agreed amount and often for an agreed time.

Personal Loan – loans available from banks and other financial institutions to private individuals for personal use such as the purchase of a motor vehicle, holiday or similar item. Repayment periods vary from one year to five years. No collateral is asked for or given for the loan.

Payday Loans – a short term loan designed to help with immediate cash needs. These loans carry a higher APR% since they do not require any security or guarantee. Service is almost immediate and in most cases online.

Rate – the percentage interest rate charged by a lender.

Repayment method – the means by which a mortgage is repaid. The two main repayment methods are ‘interest only’ and ‘repayment’.

Return – the profit you get, for example, when you invest money.

Uncleared balance – the amount of money in your account including all the uncleared items in your account and any items paid in during the day.

Unsecured loan – payday loans and most personal loans are so-called unsecured loans. This means that the lender does not have a particular asset, such as your home, to reclaim if you should stop payments on the loan before it was paid back.