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Jargon Buster

At Payday UK, we never want to bamboozle you with jargon, and we'd like to do our bit to help you feel as clued-up and up-to-date as possible; that's where this handy jargon buster comes in.

Accrued interest

This is the amount of interest that has accumulated on a credit or debt since the last date that interest was paid.[1]

Administration order

This is a way to deal with debt if you have at least two separate debts equalling under £5,000, and you have a county court or high court judgement against you which you can't pay. The county court takes just one single payment from you, which it then splits between your creditors. The benefit of this is that it stops creditors taking further action to get their money back, and stops any interest or charges that would otherwise be added to your debt. [2],[3]


Stands for the 'Annual Equivalent Rate'. This formula tells you what the interest rate would be if the interest earned by your savings was added to the amount you have in savings at the end of each year. A higher AER means your savings will earn more interest.


Stands for 'Annual Percentage Rate'. This tells you how much, per year, you will pay on a loan or credit. It is given as a percentage, and includes any fees and additional costs you'll need to pay back for that particular transaction[4]. In general, the lower the APR, the less expensive a loan is.     


A debt or payment that has not been paid. When a customer doesn’t make a repayment which they previously agreed to make, they can be said to be ‘in arrears’ with the lender.


Your belongings that are of value, or that provide you with an income.[5]

Attachment of earnings order

This order tells your employer to take money out of your wages and use it to pay off your debt. Your employer sends the money to the court, which then sends the money to your creditor. Most employers charge £1 per deduction to do this, along with the amount the court requires you to pay.[6]

Bank account

You can set up an account in a bank or building society, and it will hold your money for you.


To deal with debts when you cannot pay them off. You can file a petition yourself to be declared bankrupt, or you can be declared bankrupt by the people you owe money to (your creditors). When you are declared bankrupt, any assets you've got can be sold to pay off your creditors.[7]

Banker's draft

Less common now, due to the speed of electronic payments, this is a cheque provided by the bank. It is useful because the amount the cheque is for is taken out of your account when you buy the banker's draft - meaning the cheque won't bounce.[8]

Base Rate

The interest rate set by the Bank of England

Bounced cheque

A cheque that can't be processed because the person who wrote it doesn't have enough money in their account to cover it. If you write a cheque that bounces, you will often be charged a penalty fee by the bank for not having the funds to cover it.[9]

Building society

A building society is owned by its members; members pay into it and borrow from it.


This is the process of turning the commitment to pay an amount (i.e. paying with a cheque or making an electronic payment) into an actual transaction of money.


Cookies are small files that are downloaded to your computer when you visit some websites. They have a number of functions, including remembering your preferences on that website - for example which language or currency you want that site to use.

Credit rating

A rating indicating how likely you are to be able to repay a debt, based on borrowing and lending you have done in the past.[10]

Credit reference agency

These agencies have information about most adults in the UK, including details of how you have managed your finances and past borrowing. When you ask a lender for money, they go to a credit reference agency (CRA) and ask them for information about your financial history. This helps the lender make an informed decision about your request for a loan.

Credit limit

The maximum amount a financial company will lend you.

Data Protection Act

This Act of Parliament aims to protect the personal information of people in the UK. The government, and businesses and organisations that are responsible for using this data have to follow ‘data protection principles’ – including agreeing to keep it safe and secure, and only using it fairly and lawfully.


When you fail to make a payment you should have made. At PaydayUK, if a customer fails to make a repayment, they fall into arrears - they will only have a default recorded by a credit reference agency after three months have passed without them making a repayment.

Exit fee

An amount you have to pay if you want to get out of a contract earlier than you initially agreed. At PaydayUK, we don’t charge any exit fees.

Faster payments

Faster Payments Scheme Limited (FPSL) allows money to be paid into a bank account that same day. All UK banks and building societies can now send and receive Faster Payments, but the maximum amount that can be sent varies from bank to bank.

Final checks

Before a loan application can be completed, lenders sometimes have to carry out final checks. This might mean asking you to provide documents such as a bank statement, a copy of your passport and proof of your address.

Financial Conduct Authority (FCA)

The FCA is there to keep an eye on financial markets to make sure they work well and provide consumers with a fair deal. It aims to make sure companies do the best for their customers, and that companies provide their customers with the right products and services for them.


This is an amount of money paid when someone uses another person's money. If you are the borrower, it is the fee you pay to borrow the money. If you are the lender, it is the income you earn from lending it.[11]

Interest rate

The rate at which you earn or pay interest on an amount of money. It's usually given as an annual percentage of the original amount.

Loan agreement/contract

A promise made between a lender and a borrower. This promise – or contract – is enforceable, and requires both parties to honour the agreements they have made in the contract. The lender will have set out their terms for lending the money, and the borrower will have promised to make repayments.

Money laundering

The exchange of money or assets that a person obtained by breaking the law for other money or assets that aren’t obviously linked with any criminal activity. Using any money used to fund terrorism is also considered money laundering, no matter how that money is obtained.

Net pay

The amount of money you actually take home, after tax, National Insurance and any other deductions have been taken out of your wages.

Secured loan

A loan that is secured against your assets - often your home. If you don't repay this loan, your assets could be seized.


A statement is a record showing the financial activities of a person or business. These activities could include transactions, credit to the account, and debts.

Unsecured loan

A loan that is not secured against your assets, meaning that if you don't pay you are not at risk of losing your assets. However, the lender may still be able to take action against you if you do not pay. The loans offered by PaydayUK are unsecured.



Representative Example:£300 borrowed for 3 months. Annual interest rate of 292% (fixed). Total amount repayable is £487.71 in 3 monthly instalments of £162.57. Representative 1186% APR.

Warning: Late repayment can cause you serious money problems. For help, go to

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