Secured loans jargon buster

We want secured loans to be as straightforward as possible. The definitions below should help explain what most secured loans terms mean.

Adverse credit

Your credit may be considered adverse if you don't keep up with previous repayments. Examples of adverse credit include: County Court Judgments, mortgage arrears and bankruptcy.

Application

Providing your details to a lender or broker in order to apply for a loan. This information is used to find you a secured loan that suits you.

APR

Annual Percentage Rate (APR) is the effective interest rate that the borrower will pay on a loan, taking into account fees and any other costs. The APR is the total cost of credit to the customer. The APR is intended to make it easier to compare lenders and secured loans. The APR you get depends on the equity in your property, your credit history and your ability to make secured loan repayments. A lower APR means that you will usually pay less interest on your secured loan

Annual Interest Rate - Fixed

The interest you pay on your secured loan will stay at the original figure agreed, regardless of circumstances like the Bank of England base rate rising. APRs are usually only fixed for a specified term.

Annual Interest Rate - Variable

Standard Variable means the amount of interest you pay on your secured loan may change over time.

APR - Typical Variable

This is the APR secured loan companies are required to advertise. It means two out of three people pay this interest rate or lower.

Arrears

Missed payments on any credit you have.

Bad credit

Please see 'Adverse credit'.

Bankruptcy

Bankruptcy is a legally declared inability for a person to pay their creditors. Bankruptcy can be requested by the bankrupt person, or it can be requested by creditors in an effort to recoup what they are owed.

Broker (loan)

Companies that arrange unsecured or secured loans rather than you going direct to the lender. Brokers normally have a panel of lenders and do most of the administration involved with your loan.

We have access to over 300 secured loans. Apply for a free secured loan quote to see what we could offer you today.

Brokerage

The act of bringing together two or more parties in exchange for a fee or commission.

Budget calculator

Helps you work out your incomings and outgoings, how much you need to borrow for your secured loan and how much you can afford to pay back on your secured loan. Try our secured loan budget calculator to see what your new monthly repayments could be.

Building Society Questionnaire

A questionnaire completed by a lender/bank or building society to get details about a secured loan applicant's mortgage and property.

Business loan

See 'Commercial loan'

CCJ or CCJ's

A CCJ (County Court Judgement) is an order of a court against a debtor which can affect future secured loan applications.

Collateral

Security or equity,e.g. your home. See 'Security' or 'Equity'

Commercial loan

A secured loan for business purposes.

Commission

A percentage of a secured loan that a broker might receive for placing a secured loan with a lender.

Consideration period

Secured loans under £25,000 are legally required to have a sixteen day consideration period. During this time the secured loan broker and lender cannot contact you. You should take this time to make sure you fully understand the terms and conditions of the secured loan.

Consolidation

Borrowing money to clear existing debts. The best debt consolidation loans can lower your monthly repayments.

Credit

Unsecured credit includes: credit cards, store cards, overdrafts and unsecured loans. Secured credit includes: secured loans, homeowner loans and loans secured on your car.

Credit agreement

A legally binding contract between you and a lender detailing terms and conditions of your secured loan.

Credit check

Looks at your finances to see how risky it is to lend you money. Arrears will appear along with your address, electoral roll information and previous checks. A credit check cannot be done without your permission but is needed to qualify for your secured loan.

Credit rating

Evaluation of a person's credit history. Credit ratings are used to assess your ability to pay back a secured loan.

Credit reference agency

A company used by secured loan companies to make a credit check, e.g. Equifax.

Debt

Money owed by you to a lender or other financial institution.

Debt consolidation loan

See 'Consolidation'

Defaults

If you fail to make repayments after three months you may be classed as defaulting on the credit agreement.

Equity

Equity is the value of you property minus your mortgage and secured loan. If you have a lot of equity you could get a secured loan at a great rate. Equity is the amount of money you would receive if you sold your house after you had repaid your mortgage and any secured loans.

Fees

Fees are sometimes charged by the lender for arranging and completing your secured loan application.

Finance broker

See 'Broker'

Fixed interest rate

See 'APR - fixed'

Freehold

If your property is freehold then you own it outright but this is only after you have paid off the mortgage and all secured loans on it. You can take a secured loan against this land or property.

Homeowner

Owner of a residential property, even if you are still paying a mortgage on it.

IFA

Independent Financial Advisor. A professional adviser who is not employed by an institution selling financial services.

Leaseholder

A leaseholder has the use of a property for a specified period. If the lease is of sufficient length/value you could qualify for a secured loan.

Lender

A company that provides you with your secured loan. A secured loan broker can introduce you to the lender and secured loan that best fits your situation.

Loan

Money borrowed from a lender by an individual. We have over 300 secured loans available.

LTV

This stands for loan to value. It is the percentage of a mortgage and secured loan against the value of the property e.g. a property valued at £100,000 with a mortgage and secured loan totalling £90,000 would have an LTV of 90%.

Loan application

See 'Application'

Loan broker

See 'Broker'

Loan calculator

Our secured loan calculator shows you what your secured loan repayments might be. To confirm these repayments you will need to apply for a secured loan.

Loan purpose

Reason why you would want to borrow money, e.g. debt consolidation.

Mortgage

A loan to purchase a home where the property is used as security in the event of non-payment.

Negative equity

The amount owed on the mortgage is more than the value of the property.

Non status

Describes someone with a bad credit rating and who would find it difficult to get finance from a bank or building society.

Past arrears

Missed payments which have occurred in the past, normally within the last 12 months. A debt consolidation loan could help you sort these out.

Payment protection plans

Insurance that can be taken with a secured loan to help you make repayments in the event of accident, sickness or unemployment.

Payment protection insurance

Please see 'Payment protection plans'

Redemption penalties

When a secured loan is paid early some lenders will charge a fee. The amount usually depends if the loan is a regulated secured loan or an unregulated secured loan.

Remortgage

Changing your existing mortgage to a different lender. You may have to pay an early repayment charge if you do this, a secured loan would avoid this.

Repayments

This is the amount you pay back on your secured loan. Secured loan repayments are usually monthly.

Secured loan

A loan secured on assets, e.g. your house.

Secured loans are also known as homeowner loans. APRs on secured loans tend to be low. Browse this website for more secured loan information.

Security

The asset (e.g. your house) which the lender is entitled to sell should you be unable to repay your secured loan.

Security address

When applying for your secured loan, this is the address of the property which is being offered as security for the secured loan.

Self - certified

This allows you to confirm how much you earn. If you are self employed you don't need to provide three years full accounts.

Settlement figure

The amount needed to repay the secured loan in full.

Soft credit check

An informal credit check indicates the secured loan repayments you might qualify for. An informal credit check does not leave a record.

Sub-prime loan

A secured loan made available to people who have been turned down by Banks and Building Societies. Debtbuster Loans offer fantastic sub prime loans.

Tenant

A person who rents, i.e. not a homeowner. This includes living with parents. A tenant can't qualify for a homeowner loan.

Term

Time required to pay your secured loan. A short term secured loan is up to five years and a long term secured loan is from 5 - 25 years. The shorter your secured loan term the less interest you should pay overall.

Title deeds

Documents regarding the ownership of a property outlining owner names and details of institutions that have registered a charge against the property.

Total amount repayable

Original secured loan amount plus fees and interest charged over the secured loan term.

Underwriting

The process by which a secured lender determines your ability to repay your secured loan.

Unsecured loan

Unsecured loans provide no security for the lender. The lender has to simply hope the loan will be repaid in accordance with the terms agreed. Unsecured loans can have higher APRs than secured loans due to the higher risk to the lender.

Variable rate

This is the interest rate, which may fluctuate during the lifetime of a loan. The circumstances causing change are outlined in the loan terms and conditions. It is usually if the cost of money increases to the lender.