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Glossary |
Adverse credit:
Adverse credit is a condition where the borrower's credit history gets inflicted by CCJs, IVAs and bankruptcy.
APR:
The APR (annual percentage rate) is a measure of the cost of each credit agreement, taking into account all the charges made under the agreement. It enables people to compare the cost of each deal and work out which is of the best value for them. So, one can compare hire purchase agreement with another. However, one should not attempt to compare a mortgage with a credit card deal. Each one provides different terms.
Bank of England :
The Bank of England is the UK central bank. The interest rate to achieve the treasury’s inflation target is set by it. The Bank of England has independent power sets base and interest rates.
Bankruptcy:
Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. It is a legal action, in which, a person who is unable to meet financial obligations is declared bankrupt by a decree of the court.
Base rate:
Base rate is the lowest rate assigned to the lenders at which they will charge interest. The base rate defined by Bank of England is used to benchmark all other rates
CCJs:
County Court Judgements are referred to in short as CCJs. This happens when a borrower is not able to pay his or her debts. After the court hearing, the court may issue an order saying a borrower must repay the debt.
Credit rating:
Credit rating is a method to evaluate a borrower's history of repaying past loans. Credit reference agencies compile the credit report that may include your payment history, a list of current and past credit accounts and their balances, employment and personal information, and a history of past credit problems.
Credit reference agencies:
The credit reference agencies keep account of the borrower's credit history. Information such as details of credit agreements, payment records, court judgements, etc is made available to lenders who use it in their credit scoring or underwriting systems.
Fixed rate:
The interest rate on a secured loan which is fixed at a certain level is known as fixed rate of interest. Therefore it will remain the same for a specific period.
Secured loan:
Secured loan implies that anyone borrowing a secured loan is using his or her property as collateral for the loan. Assets belonging to the borrower in order to decrease the risk assumed by the lender back a secured loan. |
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