Understanding the terminology
Jargon buster
Account Balance
- The exact amount of money in an account
Assets
- Things that are owned such as cars, property and money
Automated Teller Machine (ATM)
- Better known as 'cashpoints' or a 'hole in the wall' and used by bank customers to withdraw money and do certain other transactions
BACS
- BACS is a scheme for the electronic processing of financial transactions
- PaydayUK will transfer your payday loan into your bank account using BACS
- Some banks can take up to 3 working days for money to clear through this process
Bank Statement
- A document sent to customers by the bank listing the transactions (money in and out) on an account – usually sent monthly
Bankruptcy
- A process of legally declaring a person cannot repay their debts, and providing protection for the debtor (the person who owes money)
Borrower
- This is a person who either applies for, or receives a mortgage or loan. A borrower must have the intent and ability to repay the loan in full, plus any interest
Bouncing a Cheque
- The process by which a bank refuses to pay a cheque because there isn't enough money in the customer's account
Budget
- A financial plan drawn up for an individual, a family, a business or a government. It is usually for a period of a month or a year, but can be for longer
Capital
- The total of a person's or a business's assets, less their liabilities
Cash Advances
- A cash advance is a service provided by most credit card and charge card issuers. The service allows cardholders to withdraw cash, either through an ATM or over the counter at a bank or other financial agency, up to a certain limit. For a credit card, this will be the credit limit or some percentage of it
Charge Card
- Similar to a credit card, but the holder has to pay off the balance in full every month
Cheque
- A written order instructing a bank to pay a specific amount to a named person. A cheque must be dated and signed
Cheque Guarantee Card
- A card issued by a bank, guaranteeing payment up to a set limit. If you pay by cheque, you will be asked to show this card
Cleared Funds
- When you pay an amount into your bank, it may take a few days to be 'cleared'. You cannot use the money until it has gone through this process
Cost of Loan
- The total cost of a loan – includes interest plus all charges, fees and so on. At PaydayUK all you will have to pay is the fixed interest fee of £14.50 per £50 borrowed
Credit
- Money to buy goods or services that the lender will pay back in the future
Credit Card
- A card used to borrow money or to pay for purchases. The card allows the cardholder credit which they can repay monthly
Credit History
- A record of credit someone has had in the past
Credit Limit
- The maximum amount allowed to be used on a credit card
Credit Rating
- An assessment of someone's ability to pay debts based on their history and current assets. It is sometimes expressed as a number called a credit score
Creditor
- A person or business money is owed to
Credit Reference Agency
- A Credit Reference Agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings
Credit Score
- The information on your credit report and the information you give when you fill in the application will help boost your credit score
Credit Search
- A credit search is a check performed by a credit reference agency to confirm how well you manage your money
- We use this information to assess your application for a loan and confirm your identity
Current Account
- A bank account which allows a customer to deposit money and withdraw money, by cash, cheque, standing order or direct debit
CV2 Number
- The CV2 number (security number) consists of the last three digits printed on the signature strip on the reverse of major credit and debit cards
Debit
- Any transaction that reduces the balance in a bank account
Debt
- Money owed to another person or business. A person who owes money to others is known as a debtor
Debit Card
- Card attached to your bank account, which takes payment directly from the cash in your account rather than on credit
Default
- This is failure to meet the financial obligations as agreed. People who do not make payments on a loan have 'defaulted' on that agreement
Deferral
- Means postponing full payment of your loan for one month by paying only the charges
- This incurs another month’s interest
Deposit
- To put money into a bank account – can be done by paying in cash or cheques over the counter, or by direct deposit, for example, from an employer
- A deposit can also be an amount which is laid down on an item to demonstrate the intention to fully purchase the item later – for example the deposit on a house
Faster Payments
- This means that when you have signed your loan agreement and your loan is deposited that you will have the funds in your bank account on the same day. If your bank doesn't accept Faster Payments then funds can take up to 3 working days to clear into your account. You can check to see if your bank accepts Faster Payments
Financial Planning
- The process of setting financial goals, and producing plans (for example, budgets) to achieve those goals
Fixed Interest Rate
- This is a rate that stays the same for the life of the loan. Just like PaydayUK's interest rate of £14.50 per £50 borrowed
Fraud Prevention Agency
- Fraud Prevention Agencies (FPAs) collect, maintain and share information on known and suspected fraudulent activity. Although you have applied to us, PaydayUK will check our own records and we will also contact a Credit Reference Agency (CRA) to get information on your credit behaviour with other organisations. This will help us make the best possible assessment of your overall situation before we make a decision
Gift Card
- Also know as a gift voucher or credit note, that can be reused to purchase goods and services as a method of payment
Gross Income
- The full amount of money earned (that is, before any deductions such as tax)
Income
- Amount of money received or earned over a period of time
Income Tax
- A tax on personal income. Usually deducted directly from wage
Individual Voluntary Arrangement (IVA)
- An alternative to bankruptcy. It is an agreement between a debtor and their creditors to pay them off over a period of time
Interest
- Money that you earn on money you keep in a bank account, or money you pay for borrowing money
Interest Rate
- The amount of interest paid or charged (given as a percentage)
Lender
- An institution or individual who loans a borrower money. There are many different types of lenders, PaydayUK is a payday lender, please see our Payday Lenders page for more information
Liabilities
- An obligation that legally binds an individual or company to settle a debt. Current liabilities are debts payable within one year, while long-term liabilities are debts payable over a longer period
Loan
- An agreement between a lender and a borrower. The borrower agrees to repay the money borrowed over a period of time – with or without interest
Loan Agreement
- A Loan Agreement is a binding contract which regulates the terms and conditions of the loan and is a legal document between the creditor (the company lending) and the debtor (the customer). It shows the key information of the amount of credit you are taking, the duration of the agreement, the total amount payable and the APR
Method of Payment (MOP)
- Method of Payment is the way a merchant chooses to accept payment for products or services
Minimum Balance
- The smallest amount of money you can have in a bank account.
Minimum Payment
- The smallest amount you can pay towards money you owe on a credit card. It is stated on your monthly statement.
Mortgage
- A loan to finance buying a house, with that house given as security for the loan.
Net Income
- The amount of income after all deductions (for example, tax and National Insurance). Also called 'take-home pay'
Ombudsman
- An official who investigates citizens' complaints against the Government or its servants
Online Banking
- A service which allows you to operate a bank account over the internet
Outstanding
- When you borrow money from a lender and have not yet made a payment, this is the outstanding balance
Overdraft
- An arrangement with a bank which allows customers to withdraw more funds from a current account than they have in the account. It is a form of lending
Over The Limit Fee
- This is the fee charged when a consumer exceeds the credit limit on their credit card
Payday Loan
- A short-term loan which you repay on your next payday. You can apply for payday loans at our partner site paydayfinancial
Periodic Rate
- This is the Annual Percentage Rate (APR) divided by 12
Personal Identification Number (PIN)
- Numbers which allow you to access information or money, from ATMs for example. You should never tell anyone else your PIN number
Processing Fees
- The fees that are charged with the process of credit card transactions and loans. PaydayUK don't charge for the processing of our payday loans
Refund
- A repayment of a sum of money given for a previous purchase. With a card purchase the refund will made to the same card used for the original transaction
Representative APR
- The Representative APR shows you what the loan would cost, expressed as a percentage of the amount borrowed, if you borrowed the money for one year
- Previously a Typical APR example represented the APR of a loan that 66% of customers would have if they applied for a loan, this has now been reduced to 51% of customers and renamed as Represenatative APR
- See our FAQs for more details
Secured Loan and Credit
- A loan with property or other assets as security
Short Term Loans
- A loan scheduled to be repaid in less than a year
Sort Code
- A six-digit number printed on your cheque that identifies your bank and the branch
Store Card
- A store card works like a credit card, but can only be used in the store that issued it
Take-home Pay
- See 'net income'
Telephone Banking
- Carrying out transactions on your bank account over the phone
Term
- The period over which a loan is scheduled to be repaid or an investment runs
Transaction
- This refers to the movement of money. For example, when you pay money into or take money out of a bank account. It can also refer to a purchase in the case of a transaction with a shop
Transaction Fee
- The amount a customer would have to pay per transaction for a credit card or loan. Some providers charge for a cash advance, if a late payment is made, or if the credit limit is exceeded. Don’t worry, PaydayUK won’t charge you transaction fees
Unpaid Balance
- The amount still owing on an account
Unsecured Loan and Credit
- A loan not backed up by collateral or guarantee of any sort
Utilities
- Services such as gas, electricity and phone
Withdrawal
- Taking money out of your bank account
