Jargon Buster

At Aspire Money, we understand there are many confusing financial terms out there. Here's an easy-to-use glossary to help you understand everything clearly.

ADVERSE CREDIT

A credit rating that shows a history of missed payments, including defaults and CCJs.

APPLICATION

Information you submit to be considered for a loan.

APR

Annual Percentage Rate — the standard way to compare borrowing costs.

ARREARS

Unpaid or late payments on credit agreements that can affect your credit rating.

BAD CREDIT

Another term for adverse or impaired credit.

BANKRUPTCY

A legal process for people unable to repay debts, severely affecting future credit.

BASE RATE

The interest rate set by the Bank of England for lending to banks.

COUNTY COURT JUDGEMENT (CCJ)

A court order registered when someone fails to repay money they owe.

CANCELLATION PERIOD

The time after a purchase when you can cancel the agreement.

CONSOLIDATION

Taking one loan to repay multiple debts.

CREDIT HISTORY

Your past record of borrowing and repaying money.

CREDITOR

A lender or finance company that provides loans or credit agreements.

CREDIT AGREEMENT

A legal contract outlining loan terms, repayment, and costs.

CREDIT CHECK

A lender’s review of your financial history and creditworthiness.

CREDIT RATING

A summary score based on your credit report.

COLLATERAL

Money or property used to secure a loan.

CREDIT BROKER

A company that finds loan options from multiple lenders.

DEBT

Money owed to a lender or financial institution.

DEBT CONSOLIDATION

Taking one loan to repay multiple existing debts.

DEBT MANAGEMENT

A repayment plan created to manage unsecured debts.

DEFAULTS

Failure to repay credit as agreed, affecting your credit record.

FCA

The Financial Conduct Authority — regulates financial firms in the UK.

FEES

Costs associated with financial services or products.

FIXED INTEREST RATE

A loan interest rate that remains unchanged for the full term.

GROSS INCOME

Total income before tax deductions.

GUARANTOR LOAN

A loan requiring someone to guarantee repayments on your behalf.

HOMEOWNER

Someone who owns their property outright or with a mortgage.

IFA

Independent Financial Advisor — provides professional financial advice.

IVA

A formal alternative to bankruptcy, supervised by a practitioner.

LEASEHOLDER

A person who owns a lease on a property, but not the freehold.

LENDER

A company that provides unsecured or secured loans.

LOAN

Money borrowed from a lender, to be repaid over time.

LOAN APPLICATION

Your submitted details for a loan assessment.

LOAN PURPOSE

The reason you want to borrow money.

PAST ARREARS

Missed payments on accounts, typically within the last 12 months.

PAYMENT PROTECTION INSURANCE (PPI)

Insurance that covers repayments if you can't repay due to illness or job loss.

REDEMPTION PENALTIES

Fees for repaying a loan earlier than agreed.

REPAYMENTS

Monthly amounts paid to the lender to reduce your loan.

SELF-CERTIFIED

Allows you to confirm your income without providing full accounts.

SETTLEMENT FIGURE

The amount required to repay a loan in full before the term ends.

TENANT

Someone who rents a home rather than owning it.

TERM

The length of time over which you repay your loan.

TOTAL AMOUNT REPAYABLE

The total amount you repay including interest and fees.

UNDERWRITING

How lenders assess your ability to repay a loan.

UNSECURED LOAN

A loan that is not secured against property or assets.

VARIABLE RATE

An interest rate that changes over the lifetime of a loan.