Annual Percentage Rate – APR

The APR refers to the total rate of interest payable over the course of a year, including fees, admin costs, and charges. Through looking at the APR on a credit product, a consumer can compare deals offered by different lenders clearly and easily. More often than not, lenders are legally required to display the APR when advertising credit items.



The individual applying for a loan.



If you have fallen behind on your financial commitments by missing loan repayments, your account will be in arrears.




A third-party which assists customers in finding a lender.



Car loan

A loan which is taken out for the purpose of buying a car.


Collections team

The department within a lending company which is responsible for collecting the repayments when due, and for helping customers who have fallen into arrears or who may be struggling with their repayments.

The Collections Team can assist with repayment plans & referring customers to independent debt advice organisations.


County Court Judgement – CCJ

A CCJ is issued by a court to a person who has has failed to repay a debt. A CCJ can harm a person’s credit rating and make obtaining credit more difficult and / or increase the rate at which lenders will offer credit in the future.

A CCJ will normally remain on a persons credit file for a period of six years.


Credit history

A record of an individual’s financial previous, showing all loans, credit cards, overdrafts, and bank accounts which are linked to that person. It will reveal all balances on all accounts, and if that person has been punctual and consistent on meeting repayments. Used by potential lenders to identify the credit profile of the applicant.


Credit rating

A score which is issued to a customer’s credit file so that potential lenders can judge their credit worthiness.


Credit search

A search and background check of an applicant’s credit file, conducted by a lender to determine eligibility for a loan.



Refers to the lending company which provided credit to a customer.



Debt consolidation

This is where a consumer uses a singular larger credit item – like a credit card or loan – to clear a number of smaller, often higher-interest debts. Although debt consolidation will not always make repaying debts cheaper, it can certainly make repaying debt more manageable.



A default notice is issued to a borrower who consistently fails to keep up with their loan repayments – it could be considered the first stage, prior to further debt recovery action being taken which may/will include terminating the loan contract, thus making the total loan balance due immediately. Further action could then progress into legal action being taken to recover the debt, in the form of a CCJ being issued, for example.

A default can harm a person’s credit rating and make obtaining credit more difficult and/or increase the rate at which lenders will offer credit in the future.


Direct lender

A lender who you borrow money from directly, rather than through a third-party.



Fixed rate

A rate of interest on a loan or credit item which remains the same and doesn’t fluctuate.


Further advance

Additional borrowing offered to existing guarantor loan customers. Customers can top-up their loan via a further advance (new loan) up to the value of £15,000 (the new loan is used to pay off the existing loan and the additional money is released as cash).




A guarantor is an individual who chooses to act as security against a loan, in a manner of speaking. They co-sign the loan, along with the applicant, and agree to take responsibility for monthly loan repayments, should the borrower be unable to do so.


Guarantor loan

A loan which will allow a consumer to borrow, on the condition that they provide a guarantor to co-sign their loan and take joint accountability. In return for providing a guarantor, the borrower will be eligible for lower-interest loans and higher borrowing amounts than their credit rating would ordinarily allow.



High-street lender

Refers to mainstream lenders, such as high-street banks and building societies, who offer lower-interest credit items. Tend to be inaccessible to people with less-than-perfect-credit.


Homeowner guarantor loan

A type of guarantor loan which is available to borrowers who can find a guarantor who owns their own home. Homeowner guarantor loans offer more favourable rates of interest and higher borrowing limits of up to £15,000.




The company issuing the loan.


Loan term

The period of time over which a borrower must repay their loan, usually over a period of scheduled monthly repayments.



Monthly repayments

A loan amount to be repaid each month, as part of an ongoing series of repayments over a period of time.



Payday loan

A short-term loan, usually of up to 31 days, which is used to tide customers over until payday. Borrowing limits tend to be for smaller sums of money. Payday loans tend to have high APRs.



Qualifying criteria

To be eligible for a loan, an applicant must meet certain criteria – as a rule, an applicant will need to reside in the UK, have a working income, and be over the age of 18.

However additional qualifying criteria will need to be met in some instances, usually in relation to an applicant’s credit score.



Repayment schedule

Refers to the scheduled loan repayment agreement between the borrower and lender, which states the amount to be repaid on an agreed date, and the time period over which repayments are to take place.



Secured loan

A loan, the value of which is secured against collateral – typically a home or car. Should the borrower be unable to meet repayments, the lender will have the legal right to seize the collateral, in order to get their money back.



Tenant guarantor loan

A type of guarantor loan which is available to borrowers whose guarantor isn’t a homeowner. While it might be easier for an applicant to find a guarantor who doesn’t have a mortgage, the maximum available loan amount is lower that which is available to somebody with a homeowner guarantor. Interest rates also tend to be higher.


Total amount repayable

The total sum of money which must be repaid by the borrower over the term of the loan – includes the original sum of money, interest and any fees.




The procedure through which a lender will process a loan application, verify data and documents, and either approve or decline the application.


Unsecured loan

A form of borrowing which isn’t secured against any collateral, such as a house or car. Lending takes place on a credit risk basis with final approval being the subject to a credit check against the applicant.



Variable rate

An interest rate which can change and fluctuate.