We’ve dedicated this page to giving you insight on some of the loan terms you may hear about and what they actually mean.
Please select a letter below to refine your search.
APR (annual percentage rate) represents the total cost of borrowing to the customer over a year. It’s shown as a percentage and includes all interest and charges, for ease of comparison.
See also: APRC, Representative APR and representative APRC
APRC (annual percentage rate of charge) represents the total cost of a secured loan or mortgage to the customer, shown as an annual percentage of the total loan amount. It includes all interest rates and charges applied over the full loan term, making it useful for comparison.
See also: APR, Representative APR and representative APRC
If you have one or more missed payments on a credit agreement (such as a mortgage, loan or credit card), the overdue amount is known as 'arrears'.
See also: Mortgage arrears
Bad credit (also known as adverse credit or poor credit) refers to when someone has experienced financial difficulties, and this has affected their credit rating. Information about how you manage credit stays on your credit file for 6 years before being removed.
You could find it more difficult to get approved for finance with a bad credit rating, as lenders may see you as risky to lend to. However, there are certain lenders who offer products specifically for those with bad credit.
See also: Bad credit loan, Bad credit rating, Credit rating
This is your track record of credit management for the last six years and makes up part of your credit file.
See also: Arrears, Bad credit, Bad credit loan
Bad credit loans (also known as adverse credit loans or poor credit loans), are designed for those with a bad or thin credit history. These loans can be either secured or unsecured.
Bear in mind that bad credit loans tend to come with higher interest rates than some other loans, due to the risk involved for the lender. If you’re taking out a secured loan, you need to be aware that your home could be at risk if you fail to keep up repayments.
See also: Personal loan, Secured loan
Also known as a bad credit score, a bad credit rating may indicate that you’ve had payment difficulties in the past. This could be due to missed payments, defaults or county court judgments, though other factors could also cause a low rating.
See also: Bad credit, Bad credit loan, Credit rating
Also known as a 'debt consolidation loan', this is a loan used to pay off existing debts. Often, you can reduce your monthly outgoings and end up with one affordable monthly repayment. Bear in mind that while more manageable month-to-month, extending your repayment period can increase the total amount to be paid overall.
See also: Debt consolidation
If you have failed to keep up payments on your credit, the lender may eventually take you to court. The court may issue an order saying you must repay the debt; this is called a County Court Judgment (commonly referred to as a CCJ). A record of the CCJ will appear on your credit history, and this may mean you end up with a bad credit rating.
See also: Bad credit, Bad credit rating
Your credit rating (also known as your credit score) is calculated by the three main credit reference agencies in the UK, to give lenders an indication of your creditworthiness.
Your rating is based on the information available on your credit report (such as your payment record over the past six years and any markers like missed payments, defaults, and CCJs).
You will have a good credit rating if you have always kept up with your payments. If you have struggled in the past, or if you have CCJS or bankruptcy on your credit history, your credit rating is likely to be less-than-perfect.
We offer a large range of bad credit loans from our panel of lenders, so we can help people with a range of credit profiles access the funds they need.
See also: Bad credit, Bad credit history, County Court Judgment, Default
Debt consolidation is a way of combining your existing debt, so you only need to make one monthly repayment to one lender.
Two common ways of doing this include:
• Getting a debt consolidation loan
• Remortgaging
Debt consolidation could help to reduce your monthly outgoings. Bear in mind that if you extend your repayment period, you will pay more interest overall.
See also: Consolidation loan
If you miss three to six repayments on a credit agreement, the lender may issue you with a default notice. This is a formal letter stating that if you don’t clear your arrears within an allotted amount of time (usually 14 days), a default will be registered on your credit report.
Once a default has been registered, it will stay on your credit file for six years. It can seriously impact your credit score and your chances of getting credit in the future. Your existing lender may pass your debt to a debt collection agency. If you continue to fail to pay, they could take further legal action (such as a County Court Judgment).
See also: Arrears, County Court Judgment
A finance broker specialises in arranging loans, often with products that are not available direct to the public. This can allow lenders and brokers more flexibility in their approach to lending.
As a finance broker, we will find the most appropriate loan for you and process your application with the minimum of fuss.
See also: Loan quote
A loan used to fund home improvements, such as a new kitchen or bathroom suite, or even an extension.
We can offer loans for almost any purpose including home improvements, or debt consolidation, for example.
Your home is used as security so you must keep up with the repayments, otherwise your home could be at risk.
See also: Consolidation loan
A loan that is secured against your property. In other words, you'll need to be a homeowner to apply - but if you fail to keep up with payments then you could lose your home.
A benefit of a homeowner loan compared to an unsecured loan is that the amount you can borrow is generally higher. The repayment period can also be longer, which could help you to reduce the amount you pay each month - although a longer repayment period will cost you more in interest.
See also: Secured loan
A loan that draws on the equity in your home (i.e., the money you have paid into it, plus any natural increase in value over time).
Home equity loans use your home as collateral, so if you fall behind with the repayments, your home could be at risk.
See also: Release Equity
We are a finance broker, so our job is to find you a loan from our panel of loan providers to match your circumstances. The loan provider is the company that lends you the money, and you have a credit agreement to repay the funds to them.
See also: Finance broker
Before you apply for a loan with us, you will have the chance to get a quote to see the loans you are eligible for. This won’t affect your credit score, as we only use a soft search tool. The loan quote you receive will take into account your personal circumstances.
If you wish to proceed with your secured loan quote, then you’ll receive a call from a qualified adviser who will be able to take you through the next steps and finalise your loan.
See also: Secured loan
If you miss payments on your mortgage or fail to make a payment when it is due, your mortgage will be deemed in 'arrears'. If you miss three to six mortgage payments, then your provider may register a default on your credit report.
If you continue to miss payments after your account has defaulted, the lender could take legal action against you, and repossess your home (as a last resort).
A personal loan is a form of borrowing where a lender agrees to lend you a lump sum upfront, and you agree to pay it back in fixed monthly instalments (including interest). Personal loans are 'unsecured', which means your home is not used as collateral. This means if you fall behind with your repayments, your home won’t be at risk – but your credit rating would still be damaged, which could affect your chances of getting approved for finance in the future.
See also: Credit rating
Equity is the difference between the current market value of your home and any outstanding balance against it. You may be able to release some of this equity in the form of a loan or remortgage for debt consolidation, home improvements or almost any other legal purpose (except gambling).
Be aware that this loan would be secured against your home, so you’d need to keep up with the repayments to make sure your home isn’t put at risk.
See also: Home equity loan, Secured loan
Where you see a ‘representative APR’ or ‘representative APRC’ advertised, this means 51% or more of customers receive this rate or better.
See also: APR, APRC, Credit rating
A secured loan is a loan in which your home is used as 'security'. If you fail to repay the loan, the lender could take possession of your home and sell it to recoup the debt. However, as long as you're confident you can afford your repayments, it can be an effective way to raise a large amount of cash.
See also: Homeowner loan