Glossary

APR
Annual Percentage Rate
Arrear
The backlogs of debt payments that build up over time are called arrears.
Bad Debt
Bad debt is a debt that is not collectible and is therefore worthless to the creditor.
Bankrupt
A person, firm or corporation that, through a federal court process, is relieved of debt payments is known as a bankrupt.
Borrower
A person who receives funds in the form of a loan with the obligation to repay the loan in full with added interest
CCJ
County Court Judgments
Collateral
Assets pledged to secure the repayment of a loan.
Credit History
A record of an individual's open and fully paid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely fashion.
Credit Report
A credit report is an individual's credit history prepared by a credit bureau and used by a broker or a lender in determining a loan applicant's creditworthiness.
Credit Score
This is a number that is supposed to show the lender how likely a borrower is to repay a loan, whether a borrower is a good or poor credit risk. This score can be a very important factor in determining whether or not you will get a loan, from whom, and what interest rate and fees will be charged on the loan. The score is generated by a mathematical formula that considers your credit report and other factors.
Creditor
A person to whom money is owed by the borrower is a creditor.
Debt
An amount owed to another is termed as debt.
Default
The term is most often used to describe the failure of the borrower to pay the installments.
Interest Rate
Cost of borrowing money expressed as a percentage of the amount borrowed.
IVA
Individual voluntary arrangement or Independent Voluntary Agreement
Lender
A company or person that takes loans
Loan Agreement
Written contract between a lender and a borrower that sets out the rights and obligations of each party regarding a specified loan
Security
The property that will be pledged as collateral for a loan
Term
The length of a loan (usually in months for purposes of loan calculations)