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Jargon

The world of money and finance is unfortunately full of jargon. Use the Candid Jargon Search to find any jargon that's confusing you and read a simple explanation.

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You can search for specific jargon by typing the word(s) into the box below left or view jargon for a whole category using the box below right.

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JargonMeaning
Affinity CardA credit card that donates to a charity/football club etc when you spend money. A good deal for the charity, but usually a bad deal for the customer.
APRAnnual Percentage Rate. Shows the overall cost of a loan, taking into account the term, interest rate and other costs.
Authorised OverdraftWhen your bank account has a negative balance, with the bank's permission. Terms are usually favourable compared to an unauthorised overdraft.
Balance TransferWhen you transfer an outstanding balance from one credit card to another, perhaps to benefit from a lower rate.
Booking FeeA fee charged by many mortgage lenders when you apply for a mortgage. Common, as it helps them make their interest rate look more attractive.
Bridging LoanA bank loan enabling you to buy a property before selling your existing home.
BufferAn agreed amount above your authorised overdraft into which you can slip without the usual penalties applying.
CapThe maximum interest rate above which your mortgage cannot go.
Card IssuerThe bank, building society or store whose name is on your card.
Cashback CardCredit cards that give you a percentage of the money you spend (e.g. 1%) as a cashback.
Chip & PinCredit card security system that replaced signatures. Combines a small electronic chip built into the credit card with a four digit number entry at the point of purchase.
CollarThe minimum interest rate below which your mortgage cannot go.
Credit LimitThe maximum amount you may owe through spending on the card. Exceeding this could incur charges and the card being suspended.
Credit ScoringA method lenders use to assess how likely a person is to repay the money they wish to borrow.
Discounted MortgageA mortgage that offers a discount on the lender's SVR or a tracker rate, usually for up to three years.
Fixed Rate MortgageA mortgage whose interest rate is fixed for a period of time, usually up to five years.
Flat InterestAn interest rate that is charged on the original sum borrowed throughout the term. To get a rough estimate of the APR, double the figure.
GAP InsuranceGuaranteed asset protection insurance is designed to make up any shortfall between what's owed on hire purchase and a car insurer's payout if your car is written off or stolen.
Hire PurchaseSimilar to a loan, except the goods purchased do not belong to you until the loan is fully repaid.
In ArrearsDescribes a debt when you've failed to keep up the monthly repayments.
Interest Only MortgageA mortgage where your monthly payments are used to pay interest only. The amount borrowed will still be outstanding at the end of the mortgage term.
Interest-Free PeriodThe time between when you buy something on the card and the date when you must pay your monthly bill. Can be up to 56 days.
Lease PurchaseAnother name for hire purchase, usually applied to car policies.
Minimum Payment The minimum amount you must pay each month to avoid charges in addition to interest.
MortgageA type of loan used to purchase a property. It will normally run for 20 - 25 years and be secured against the property being purchased.
Mortgage Indemnity GuaranteeAn insurance designed to protect mortgage lenders if they repossess your home and are left out of pocket when the property is then sold.
Negative EquityThe difference between your home's value and your mortgage when the home is worth less than the mortgage.
Offset MortgageA mortgage that is linked to a bank account, with any savings offsetting the balance owed, hence interest payable, on the mortgage.
OverdraftA temporary loan that kicks in should the balance on your bank account fall below zero.
PCPsPersonal contract plans, a type of hire purchase where you must pay a large final payment to keep the goods (e.g. car) else hand it back to the finance company.
Redemption PenaltyA charge applied by some mortgage lenders if you want to repay your mortgage early.
Re-MortgagingSwitching from your current mortgage to another.
Repayment MortgageA mortgage where your monthly payments are used to pay interest and repay the outstanding balance.
Rewards CardCredit cards that give you some sort of reward (e.g. air miles) when you spend money.
Secured LoanA loan where you have to offer the lender security (e.g. your home) in case you can't keep up payments.
Student LoanA government loan for qualifying students, offers a subsidised rate of interest linked to the rate of inflation (RPI).
SVRStandard variable rate. A mortgage lender's plain vanilla mortgage rate, usually a few percent above the Bank of England Base Rate.
Tracker MortgageA mortgage whose interest rate is variable and follows the Bank of England Base Rate exactly, usually by a fixed amount above or below.
Unauthorised OverdraftWhen your bank account has a negative balance, without the bank's permission. This can result in stiff charges and high interest.
Unsecured LoanA loan where you don't have to offer the lender security (e.g. your home) in case you can't keep up payments.
Valuation FeeMost mortgage lenders charge you to carry out a valuation, making sure the house is worth at least what they're lending you.