Assets

Anything which has value. Generally used to provide as security for the payment of debt.

Bad Debt

Any debt that is not collectible and is therefore worthless to the creditor.

Equity

Equity is the difference between the market value of a property and the debts registered against it.

Loan Agreement

A written contract between a lender and a borrower that clearly lays out the terms, conditions, rights and obligations of both the parties.  

Down payment

The amount of money which has to be deposited initially to bring down the cost of financing.

Term

The time period within which the complete repayment of the loan is made.

Bankruptcy

Legal declaration which states that a person or company is unable to repay their debts. Bankruptcy is considered last resort and has negative effect on the borrower’s credit history.

Credit history

A record of person’s financial life giving the details about current and repaid debts. This is used by lending company to asses the risk of a potential borrower.

CCJs

A County Court Judgement that is issued in the case where there is a failure in repayment of an outstanding debt. This goes on record and affects credit rating.

Guarantor

A person who agrees to the responsibility regarding the repayments of the debts of another. In case the borrower fails to make repayments then the guarantor will be obliged to make those repayments.

Interest rate