Jargon Buster – What does it all mean?

Written by Jools Smith

5 June 2018

There are so many financial terms you’ll have come across when applying for credit, many of which you might not be completely familiar with. We’ve pulled together a list of some of the more common you might find useful.


This is short for Annual Percentage Rate, and is the annual rate of interest you will be charged for the loan. It includes the interest you pay and any other charges, such as admin fees.

Representative APR

This is what organisations have to show on advertising and commercials and it refers to the rate that at least 51% of people who are accepted for the product will pay. Some customers may receive a different APR depending on their credit rating and circumstances.


If you are in arrears it means you have fallen behind with repayments for money you owe.


You can take out a loan which replaces all your outstanding debt into one loan and one weekly/monthly repayment. Outstanding debt may include credit cards, loan repayments or household bills. A consolidation loan can make your debt more manageable. 


Also known as a County Court Judgement, this is issued to you for failing to repay a loan or an outstanding debt or fine.

Continuous Payment Authority (CPA)

This is where you give a company permission to regularly take cash from you. Rather than taking your bank account number and sort code, they will ask you for the long number across your debit or credit card. This allows them to take a payment whenever they feel they are owed money.

Credit Score

Your credit rating is used by banks and lenders to estimate your risk potential and how likely you are to pay a loan back. Your credit report/ history includes the last 6 years and tells them about your past borrowing and repayments which affects their decision when lending money. 


A person or company that gives you credit by allowing you to borrow money which must be repaid in the future.

Debt Management

If you are in debt management you are on a repayment scheme offered by a debt management company. They will negotiate your repayments with your creditor to make them more affordable and achievable for you.

Income and Expenditure

To see if you can afford to take out a loan, companies will often perform an income and expenditure check. This shows how much cash you have left over each month and how much you can afford to borrow without leaving yourself short.

Interest rate

This is the percentage at which interest is charged on your loan. Depending on the type of loan, this may be Fixed or Variable. Fixed means the interest rate will not change during the life of the loan, Variable may change.


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