Glossary
At IM Financial Services Leisure we understand how frustrating it can be to digest all of the terminology used throughout the industry. That's why we've put together a page with the definitions of some of the key financial terms.
Credit Rating
A person's credit rating is based on their credit history, maintained by credit reference agencies, based on information supplied to them by lenders. A person who has a bad credit history is likely to have a poor credit rating. Banks and other financial institutions obtain an applicant's credit rating when considering application for finance. A person with a poor credit rating may find it very difficult to obtain a loan. Banks and other financial institutions obtain this information through credit reference agencies, such as Experian and Equifax.
Credit Reference Agencies (CRAs)
Companies that hold information regarding individuals that is of interest to lenders. This information can be used in order to help the lender make a decision on whether or not to lend the consumer money.
Interest
The amount a lender charges a borrower for the use of the lender's money. For example, if money is borrowed from a lender in the form of a loan, the lender will charge interest for the use of that money. Interest can be charged daily, weekly, monthly or annually.
Joint Debt
When two or more people borrow money together or are responsible for a debt together. A lender can recover payment of the whole amount from either party, unless the contract limits the amount each party must pay.
Repossession
A lender may be able to claim or take possession of any property, assets or investments that has been provided as security for the repayment of a loan in circumstances where the borrower cannot repay the loan.
Sub-prime
A term used to describe customers with poor credit ratings or who demonstrate a poor credit history.
Loan term
The length of time in which a loan must be repaid.
Terms and conditions
Terms and conditions set out the specific obligations of each party in respect of a transaction. They outline how a product or service can be used and should be read and understood before the product or service is used by the consumer.
