Reading about consumer finance can throw up some strange jargon and acronyms which most people do not know the meaning of. Here at PayDayMart.co.uk we want to give you the best service and help our customers to understand everything we tell them, even the small print.
Here is some industry jargon explained that you can refer to if anything you come across is difficult to understand.
ACH
This stands for automated clearing house and this is responsible for dealing with financial transactions that happen in the UK every single day. The ACH used in the UK is BACS Ltd and this is owned on behalf of the financial payments industry by large financial institutions and several banks.AER
AER or annual equivalent rate is the name given for the rate of interest a person would get if any gross interest on a loan was compounded and paid annually. It will not include one off charges like sign up fees and can be used to compare annual interest put onto financial products that have various compounding terms - i.e annually, monthly or daily.Agreement
Agreements are usually between two or more groups of people or individuals and they are a formal arrangement or decision. For loans the agreement is the signed document that makes the loan formal and is made between the lender and the borrower. As soon as you sign a loan agreement you have made yourself responsible for repaying the loan plus any interest and fees. Before you sign such a credit agreement you must make sure that you understand the terms and cost in full.APR
APR or annual percentage rate is the term for the charges and interest due on any amount that is borrowed or loaned, it is shown as an annual charging rate.Arrangement Fee
This is a way that many lenders such as building societies, banks and some loan companies will make more money. It is a onetime fee added onto the cost of a loan that is for administration costs.Arrears
Arrears are any missed payments on a loan or other credit product, so if you fall behind with any payments you are classed as being in arrears. If you fall into arrears you could find problems with getting credit in the future and if the arrears are on a mortgage you could find that your home is at risk of repossession. If you find yourself in arrears you must speak to your creditors and you could also speak to a charity credit organisation like the Consumer Credit Counselling Service who are on hand to help. Wages tend to be paid in arrears for the work you have done on a monthly or weekly basis.Assets
Assets are anything that a person owns outright that has a financial value, for example a house or goods that can be sold for a profit. Anyone who is in arrears (as above) for some time, could find that their assets are seized and sold to recover the outstanding arrears. In the case of secured loans, this is certainly the case as they are used as a financial guarantee against your loan.Assurance
Assurance is a form of insurance policy that will pay your next of kin a lump sum when you, the policy holder pass away. It can be used to help with the cost of a funeral and so on.BACS Ltd
BACS Ltd was originally known as the Bankers Automated Clearing Service. It is an organisation that is owned and controlled by a group of building societies and banks and it is used to clear electronic transactions within the United Kingdom.BACS payment
This is a type of credit which is paid electronically into a UK building society or bank account and it is made up for a certain amount. BACS Ltd (as above) is responsible for clearing these credits and they take an average of three days to be processed and cleared. When it is compared to a PaydayMart.co.uk payment which can be in your bank account the same day, you can see that it is very slow.Balance
The balance is the total amount of money that is in a credit facility or bank account. It is also possible to have a negative balance on a bank account.Bank
Banks are financial institutions that are used by businesses and individuals to borrow money or invest. Other services offered by banks include insurance policies and exchanging foreign currency. The four biggest UK banks within the UK currently are Lloyds TSB, Barclays, Royal Bank of Scotland /NatWest and HSBC.Bank Loan
This is a loan that is from a bank and can be used for business or personal purposes. They tend to be for amounts of money in excess of £1000 and these can be repaid over 12 months or longer. While many loans are marketed in terms of their APR you should always check the total amount that you will have to repay. Getting a loan from a bank can involve meeting up with a bank manager and not everyone who applies for a bank loan will be approved.Bankers draft
A banker's draft is a check from a building society or bank that is against money in your personal bank account. It is a good way of receiving or sending money in a situation where cash is insecure and could be inconvenient. With this in mind, they are usually for large sums of money.Base Rate
The base rate is the standard rate of interest which is used by lenders to set rates for their various financial products. The Bank of England is responsible for setting the base rate in the UK and this happens on a quarterly basis. There is also an interbank rate of lending (London Inter-Bank Offer Rate or LIBOR) and this can also affect the rate of interest which banks are able to offer.Bounced Cheque
If a person or business sends a cheque to a person or organisation and there is not enough money in the bank account and the cheque was drawn on to pay for it, it will bounce. In these cases the cheque is returned to the account holder, underpaid and this will usually result in a large fee from the bank.Budget
Personal budgets are used to show a persons regular income against their regular outgoings, what is less can be used to determine a person's remaining balance. Many people use their budget to predict when they will be short of money or when they will have a little bit extra. It is useful to use and maintain a budget for your finances so that you can stay in control of yours.CAB
CAB or the Citizens Advice Bureau is an independent, free and confidential organisation that is funded in part by the government, in part by charity. It is used to help anyone to understand and resolve any financial legal or other problem that they may have. All branches of the Citizens Advice Bureau are manned by volunteers and they are all registered charities.Capital
Capital is a sum of money that is normally quite large and is used for the purposeof creating more money, in some instances, capital is invested into a new business. Capital cannot be used to describe any profit or income that is gained from investments or from any form of interest paid on a mortgage or loan.Cash advance
Cash advances are money which is given against an agreed form of credit like a loan or credit card. It can also be used about a loan that is quite small and repaid over a short space of time, unlike a more traditional type of loan, such as one from a bank which can be paid back over 12 months or many decades, like a mortgage.Cashback mortgages
These are not as easy to come by today but they were a type of mortgage that would give the lender a lump sum on top of the money they had lent them for their mortgage. In some cases this was deducted from the mortgage or put onto the balance and repaid over a set period of time. Many people would use this form for alterations or repairs on their new home.Cash flow
This is the term used to describe any money being paid to or paid from a business or individual. In some cases cash flow will be measured over a set period of time and is used to highlight any issues with liquidity. Some businesses will even fail due to a shortfall of incoming cash even during periods when it is highly profitable. In much the same way an individual can find themselves in arrears even though their expenditure meets their income.CCCS
The CCCS or Consumer Credit Counselling Service is another registered charity that was set up to help people in financial difficulty. They offer independent, realistic free and impartial advice on many areas of personal finance. The charity that is over the CCCS is the Foundation for Credit Counselling with its headquarters in Leeds, it has an online service, 10 centres regionally and a free telephone service that covers the UK.CCJ
Anyone who finds themselves in arrears could find that their creditors take a County Court action against them in order to get back the money they borrow through the courts. If you are able to repay the full arrears, you can avoid going to court. If you are unable to do this, a private hearing will look into all of the evidence and make a judgement on whether or not you still owe any money. If the court determines you do, they will decide how much you should repay and how you should repay the arrears. This ruling is then called a CCJ or County Court judgement. In Scotland such claims are dealt with via the Sheriff Court.CHAPS
Clearing House Automated Payment System or CHAPS is a system that clears off payments between bank accounts on the same day that the instruction is given. However, this must be made on a weekday and before 3 PM.Charge card
Charge cards are like credit cards in that a person is able to spend on them instead of having to pay a minimum payment each month, like you would with a credit card. You must clear the full balance on a charge card each month. Failure to pay this on time will lead to high penalty interest rates.Charges
This is the term for any money that is paid to a financial institution for any of the services that they have provided. If the terms of a service are broken or misused in any way, penalty charges can also be added. This can be for things such as bounced cheques, missed late payments and unauthorised overdrafts.Chip and PIN
This is a system of payment that was introduced to cut down on card fraud. Chip and PIN cards contain a smart chip that stores a persons 4 digit PIN (Personal Identification Number). Whenever a person uses a chip and PIN card they need to enter their PIN into a special keypad rather than having to sign a receipt. Cards like this can also be used to withdraw money from cash machines.Cleared balance /cleared funds
These are any type of credit: overdrafts, electronic payments, cheques or cash that have been cleared and can be accessed. Cleared balances will be updated throughout the day as payments go into an account and go from it. You could only transfer funds or access money using a cleared balance.Clearing cycle
This is the name given for the process that any electronic payments or cheques have to go through when they are paid to your account. The clearing cycle can take different amounts of time depending on the type of payment that has been made. CHAPS payments will be made on the same day providing that it had been sent before 3 PM cheques and BACS payments on the other hand will take around three days.Credit card
This is a plastic card that looks like a cash card and this can be used to pay services and goods up to your set credit limit. As you are borrowing money to use a credit card they will have higher rates of interest than say an unsecured loan. However, if you are able to repay the full balance by the time stated every month, the interest will be lower. People who limit minimum payments will find that it can take years and years to pay off their balance and they can sometimes find a credit card hard to control. There are many different types of credit cards on the market, so you must take your time and decide on the right one before applying.Consumer Credit Act
The Consumer Credit Act 1974 is a law that states that the majority of businesses offering services or goods via credit or any company that allow consumers to borrow money from them, have to be granted a licence from the Office of Fair Trading (OFT). Any company to lend money without a licensing arrangement are committing a criminal offence which can lead to a large fine or even imprisonment. Unfortunately, not every lender is regulated and these people are often termed as loan sharks.Credit crunch
This is a term that describes a fast reduction in the availability of forms of credit. When a credit crunch occurs, people will also find that getting loans from banks can cost much more. As you would think, there are various reasons why banks and such lenders would hike up the rate of borrowing on tights and applicants requirement. A credit crunch will often occur when banks perceive there to be much less collateral used against issuing loans, for example, house prices fall or there is a high risk of solvency for many banks in the system. Unexpected interest rate rises from the central bank can also lead to a credit crunch.Credit balance
This is the amount of money a person has in their account when they have a positive balance or they are in the black.Credit limit
This is the term for the maximum amount that a person is able to borrow. It is usually determined by the lender and can vary between individuals. At PaydayMart.co.uk we treat everyone as an individual and use a system that means we charge you on the basis of how our service is used by individuals.Credit rating
Credit ratings are used to determine how credit worthy a country, business or individual is in terms of lending. The term credit scores are also used when speaking about credit ratings and these are determined by a persons current assets, their liabilities on their previous financial history. A credit rating is used to assess the probability of a lender being able to pay back in any manner they had borrowed. Anyone with a good credit rating will find that they are able to borrow larger sums of money, whereas, someone with a poor credit rating may be refused credit or allowed to borrow smaller amounts.Credit reference agency
Credit reference agencies or credit bureaus, as they are called in the US, are companies that will gather information from different sources to provide factual information on consumers for different purposes. It can be shown as a credit rating and can be used by lenders to judge a person's ability to repay a bank loan. Lenders can use this information to decline applications or set an appropriate rate of interest for an individual. While many lenders will set different rates of interest based on risk here at PaydayMart.co.uk, we do not offer this type of price discrimination and offer a clear and straightforward structure of fees for all of our applicants. Credit reference agencies in the UK are: Equifax, Callcredit and Experian.Credit report
This is a type of document that will give a rundown on your previous credit history. Information that is contained in a credit report is updated and collected by credit reference agencies, debt collectors, retailers and banks. It will show applications for various forms of credit, borrowing, repayment of bills and any court judgement that you may have. Companies offering credit will buy these reports as part of your credit assessment. It is possible to see your own credit report by contacting one of the credit reference agencies.Debit card
This is a card that will allow you to pay for goods or services and will take the money from your bank within one or two days of the purchase. Unless you are using an overdraft there is no credit facility on a debit card.Debt
This is any money that is currently owed to a company or person.Direct debit (DD)
This is an instruction that you will send to your building society or bank so that someone else can take money directly from your account. While the amount can vary, a person must be told of the dates and amounts to be taken, before the money can be withdrawn. Many people pay bills using direct debit.Debt Consolidation
This involves a person taking out a single loan for a large amount to pay off numerous other outstanding credit commitments. Many people do this and will finally get a lower rate of interest and find that doing this each month is much easier than paying several different outstanding forms of credit. If you have collateral that you can secure the loan with, you will get a lower rate of interest as you are less of a risk to the lender.Discounted rate
This is a period of time when a lenders variable rate of interest is at a fixed percentage for a set period of time, which is lower than their standard variable rate. After the discounted rate period is over, the rate of interest charged will go back up to the standard variable rate offered by the lender.Doorstep loan
These are types of unsecured personal loans a local agent will deliver straight to your doorstep. While the amount of money borrowed can be lower, the amount of interest that will be charged on this type of loan tends to be very high. You make repayments to your agent when they visit your house.EAR
Or Effective Annual Rate is the name given for the interest that is charged on a loan or overdraft shown at an annual rate. Unlike APR it does not include charges or fees.Early repayment
This happens when a person repays any money they borrowed before the due date. Some run companies that will not allow this or even charge a penalty fee for early repayment. PaydayMart.co.uk does not do this and customers are able to request an early repayment anytime.The interest is only paid up until the time you repay the loan in full.Equity
This relates to the value of an organisation or company and can be split into equal parts owned by shareholders. Equity can also refer to the individual parts, which means directors can have a particular amount of equity in their business. Negative equity, in relation to property, happens when a person gives more money on a mortgage than the property is actually worth. However, if you sell a property and get back more than you paid for it, you will have received the equity.Equity release
It is possible to borrow money based on any equity that is in your property. You can do this by securing a loan against the total value within your property or extending a mortgage that you already have.ERTF
ERTF or exchange rate transaction fee, if they charge that, has to be paid when paying for goods or services in a different country by card or withdrawing foreign currency while abroad. Foreign currency is converted into the equivalent pounds sterling and the ERTF (fee) is then charged for this happening.Fixed rate interest
A rate of interest that will stay fixed at the same amount for a set period.FLA
FLA or Finance and Leasing Association is a trade association for the consumer, motor and asset finance industries in the UK. It includes subsidiaries of banks and building societies, banks, finance sections of manufacturing companies and retailers and several independent firms. PaydayMart.co.uk is part of this and the types of services that are offered through the FLA are: hire purchase, unsecured and secured personal loans, credit cards, finance leasing, conditional sale, various purchase plans and store cards.Flexible loan or mortgage
These are loans or mortgages that are all individual, to overpay and underpay without incurring a penalty. In some cases you can even take payment holidays where you will not have to make any payment for a set period of time.Further advance
This is another loan from an existing mortgage provider and it is yours against the first charge relating to the property. These can be used for building work, home improvements, debt consolidation and so on. However, in order to secure a further advance they must equity in your property.Gross
This is the total amount of cash before any fees or taxes are deducted from it. A person's gross salary is the amount that they are paid prior to any National Insurance or PAYE deductions are made.Gross interest rate
This is the amount of interest that is earned prior to tax being deducted.Guarantor
This is a person that will guarantee loan repayments or a mortgage on behalf of a borrower. They may also be used to help borrowers who do not have enough income to qualify for a mortgage on their own. They also lower the risk for a lender.IFA
Or Independent Financial Advisor helps a person to get their finances in order by helping them to find the best products and services for their needs. All IFAs have to be regulated by the Financial Services Authority (FAS). Payment to IFAs is normally by:• One off fees
• Commission, normally as a percentage that is from the money you invest or pay
• A combination of the two
Insurance policy
A type of policy that will pay money directly to the holder is any losses are incurred due to damage or theft of their property or themselves. It is also possible to get insurance policies that will cover legal fees, medical costs, travel, cars, pets and buildings.Interest
Interest is the amount of money that an individual will pay for borrowing any money, depositing any savings or receiving any money from their savings. Interest is always expressed as a percentage rate which is over a set period of time. Common types of interest are EAR and APR and a person should always understand what they mean especially, when looking at financial products like savings accounts and loans. You should always know how much money you will be repaying before you take out any form of credit.Interest-free
This is a period of time when you are not charged any interest at all for any money you have borrowed. Many retailers will offer this kind of deal on items such as cars or sofas. Before you sign an agreement check out the cost of the remaining credit after the interest-free period have finished.Interest only
A type of loan or mortgage where only the interest will be paid via your monthly payments. You will not repay any of the capital and this amount will then become due at the end of the term. Anyone who takes out the interest-free mortgage needs to have a way of building the money to pay off the capital when the mortgage ends.Interest rate
This is always expressed as a percentage of the amount borrowed or the amount deposited in savings.Investment
You will put money into an investment but it can also take up your time and effort and it can result in you getting a profit or the advantage. If you're talking about money, an investment is paid for up front when thinking about buying shares, buying a house or investing in works for example. You can also invest in something slowly like a pension or savings account.Lifetime mortgage
These tend to be for people over 60s and will gradually release money to a person as they borrow against the value of their home. These do not require monthly repayments but the interest is added onto the loan with the whole amount becoming due and being repaid if the person moves into long-term care or passes away. This repayment usually comes from selling the persons home. As nothing is repaid until right at the end of the mortgage, more interest will be added than a traditional mortgage.Liquidity
This is an accounting term and is used to measure a debtor's ability to repay their debts when they are due. Normally, it is expressed as a percentage or a ratio of a person's current liabilities.Loan
This is any money that is borrowed and has to be repaid according to the agreed terms. PaydayMart.co.uk offers borrowers short-term cash advances, however, there are other types of loans available.Loan period
This is how long a person has to repay their loan. This will include the interest and full loan amount and can go on for several years. The loans available from PaydayMart.co.uk are short-term and can be repaid over up to a month.Loan PPI
PPI or payment protection insurance is a form of insurance that will cover a person's repayments to be alone in various circumstances. For instance, if the person is hospitalised, dies, gets diagnosed with terminal illness or disability or has involuntary unemployment. Some banks have been criticised recently for their aggressive selling of PPI as this is not necessary for all applicants.Loan shark
A person who provides loans and who is unregulated. They tend to charge excessive amounts for lending money and can demand money via violence or blackmail.Mortgage
A loan which is secured and is used to help a person to buy a property. Usually, these last for 25 years and the lender can take possession of the property and sell it if repayments are not made as per the agreement.Net
The amount that is left from an amount of money after taxes, fees and other deductions have been taken from the gross. A persons net pay is the money they receive after their deductions have been made.Net interest rate
The net rate of interest which is payable after the deductions of UK income tax which has been specified by law (at this point in time 20.00%). This rate can vary according to a person's circumstances, so the net rate is normally only shown as an example.Nominal annual rate
Rate of interest that would be applied if there was no inflation in the UK and interest was not added annually.OFT
OFT or the Office of Fair Trading is a government department that is non-ministerial and was established back in 1973. The USDA is responsible for protecting and promoting the interests of consumers throughout the UK and making markets work well for them, at the same time they need to make sure that businesses are operated fairly and competitively. PaydayMart.co.uk and other unsecured loans lenders have to be regulated by the Office of Fair Trading.Online banking
This is also known as Internet banking or e-banking and it is the term given for web-based banking services. Individuals can look at their balance, transfer cash and order new cards or cheque-books this way.Online payday loans
Loans that are repaid on your next payday and can be applied for via the Internet. Unfortunately, there are few companies that really can offer an online service, as many will expect applicants to speak to someone in their call centre or fax documents. PaydayMart.co.uk is a genuine online loan service as applicants do not have to post or fax documents or speak to a call centre.Outstanding balance
This is the amount that a person still has to repay from an amount that they have borrowed from a lender. As payments are made, an outstanding balance will reduce, unless you have an interest only mortgage.Overdraft
Banks offer overdrafts as an agreed amount that a person can borrow against their personal account. Overdraft at our agreed can be a low-cost way to borrow money over a short period. However, unauthorised overdrafts can result in high fees and banks have been criticised for charging these recently.Overpayment
When a person makes credit repayments that are in excess of what they are expected to, or pay occasional lump sums, these are known as overpayments. Some loans will allow lenders to make overpayments to settle their borrowing earlier. However, you need to check with your lender to see if these are allowed. Not all lenders allow them, as they reduce the total amount of interest they will receive. p.a. Per annum or per year.Payday loan
This can also be known as a payday advance pay check advance and is a loan in the short term that will help a borrower out until their next payday. Often a fixed fee per hundred pounds borrowed is added and the loan is repaid on the next payday, even if you applied before this. They are great for people unable to get credit and can be a viable option when used correctly.Penalty charges
When a person breaks the terms of their borrowing or banking agreements they will be hit with penalty charges. Bounced checks, still standing orders and unauthorised overdrafts usually incur these charges.Personal loan
A loan is offered to individuals for their personal use. These are offered by lenders and banks and are usually used to pay for cars or holidays. A personal loan can be repaid off over 1 to 5 years although PaydayMart.co.uk has personal loans that can be good for as short as one day.PIN
Personal identification number is a 4 digit number that a person needs to use when paying for goods on a cash card or withdrawing from a cash machine.Promise date
The date on which you promise you will repay a loan.Rate
The level of interest that a lender will charge. It can vary depending on a person's circumstances and people are seen as less of a risk will get better rates of interest on borrowing. PaydayMart.co.uk will charge the same interest rate for everyone who is accented for one of our loans.Redemption penalties
Fees that can be added to a person's loan if they want it repaid early or if they repay their loan when the rate of interest is fixed. Mortgages tend to have redemption penalties and are used to prevent individuals from accepting a better mortgage from another lender via remortgage.Remortgage
Changing your mortgage without having to move house. Many people do this to go to a new lender who has much better terms of interest or in order to release equity within the home. The money that is borrowed from your new mortgage company will be paid to your old, to pay the mortgage off. However, you may be hit with administration fees for this and your home may need to be re-valued.Repayment method
The method used to repay a mortgage. There are two main types of repayment methods which are 'repayment' and 'interest only'.Repayment mortgage
A loan for a home where the individual will pay back interest and a portion of the capital every month. In short, the total amount owed will be reduced over a period of time but the first payments will just cover the interest, yet over time the capital will also be reduced.Return
The profit that an individual or company will get from investing money in things such as shares.Secured loan
A type of loan which is secured on the equity in the items has been bought, for example, a home or car. Lenders have the right to claw back the loan value from this equity if an individual does not make their regular repayments. Mortgages are a very common type of secured loan and most of these loans are a massive commitment and have a high level of risk but they can offer a significantly lower rate of interest.Share
The unit of ownership a person has in a company.Share certificate
A document that details a person's amount of ownership in a company.Share dealing
The name given to buying and selling shares.Standing order
Payment method from your bank that is straight from your bank account. All transactions are on certain dates and for a set amount.Store card
A card that is very much like a credit card, however, they are only for use in a specific store group or card and have high rates of interest. A person can get discounts while shopping in the store and they should not be confused with reward loyalty cards. You can often get credit cards that are linked to stores such as Asda, Tesco, John Lewis, Sainsbury's and Marks & Spencer.Short-term loan
These have varying definitions. A banks short-term loan might be for one year whereas, a short-term loan from PaydayMart.co.uk could be for anything up to 30 days. Payday loans are also another type of short-term loan but these can also be quite expensive.Transaction
The term given for any moving money around between bank accounts or when paying for goods or services. If money is paid into or taken from a bank account or when payment is made in a shop for instance.Trust
Trust is the measure of confidence of the goodness, skill, honesty or safety of a thing or person. It is one of the main principles behind PaydayMart.co.uk. By using our trust rating system you are able to gain more of our trust every time you responsibly use our service. We show our trust in you by raising your credit rating and giving you more opportunities to borrow, should you need it. It can also be a type of legal arrangement when a organisation or individual controls money and /or property on behalf of another organisation or person. Children's finances are often placed in trust until they are old enough to deal with them by themselves.Unarranged borrowing
If you go over your agreed overdraft or into an unauthorised overdraft, it is classed as unarranged borrowing and can mean very high fees.Un-cleared balance
The money that is in a person's account that takes into account all paid items and any un-cleared items over the course of a day.Underpayment
A payment for a mortgage or loan that is less than the specified amount. In certain cases you may be allowed to arrange such underpayment short periods of time but only if you can give a valid reason for this underpayment.Unsecured loan
A loan where the lender cannot seek to reclaim the total loan outstanding from a person's individual assets, such as their home, should they fall behind on their agreed repayment schedule. These loans are still a financial commitment and can mean serious penalties if the loan is not repaid on time. Loans from PaydayMart.co.uk are classed as an unsecured loan.Variable rate interest
Rates of interest that will increase and decrease and is most often used on mortgages loans. These increases and decreases occur in conjunction with fluctuations in the base rate which is set by the Bank of England.