Account balance – The available amount of money in your account.
Annual fee – The amount charged by the lender each year to cover the service costs.
Application – A standardised form used to apply for a loan and to record relevant information about the prospective borrower.
Appraisal – A written analysis of the estimated value of an item or property.
Appreciation – An increase in the value of an asset due to changes in the economic and other conditions, ie – inflation.
asset – Anything valuable owned by an individual that generates income.
Bad credit – The negative credit rating which appears when the debtor fails to make repayments, which in turn makes it harder for them to obtain new loans.
Bad debt – A debt that is not collectible and is therefore worthless to the creditor.
Bankrupt – A person or institution’s condition of being unable to repay the debts they owe to creditors.
Business loan – A loan granted to fund a business and it’s proceedings.
Budget – A detailed plan of income and expenses over a defined period of time in order to manage costs and profits.
Cash advance – A quick loan received from a credit provider or lending institute.
Collateral – A borrower’s pledge of their property as security for a debt.
Commercial loan – A loan used to finance a company’s expansion, its projects or its working capital needs.
Construction loan – A loan used to finance the cost of construction.
Contract – An oral or written binding agreement between two or more parties.
Conveyancing – A legal process of transferring ownership of property from one person to another or the seller to the buyer.
Credit – An agreement which allows a borrower to receive something of value in exchange for a promise to repay the lender at a later date.
Credit card – A card that allows you to buy goods, services and obtain cash advances on credit with the promise to make repayments later.
Credit report – A report of a person’s past history from a credit bureau used that can be made available to a lender to determine a loan applicant’s worthiness.
Debit – When money is taken out of your account for something you’ve bought or to repay money you owe.
Debt – The obligation of the borrower to repay the amount owed for the borrowed funds.
Debt consolidation – The combination of multiple loans into a single loan, often at a lower periodic payment and interest rate.
Default – Failure to make the required debt payment when it is due.
Deposit – Money paid in good faith to assure the performance of a contract.
Depreciation – A decline in the value of a personal property or item.
Direct debit – A regular monetary payment of one or various amounts, to an individual or a company from your account with your consent.
EFTPOS – (Electronic Funds Transfer at Point of Sale) An electronic payment system to buy goods and services using a fast cash savings, cheque or credit card.
Equity – The difference between the market value and the outstanding mortgage balance on a home.
Finance – The commercial activity of providing funds and capital.
First home owner grant scheme – (FHOG) One off $7000 minimum payment to eligible first home buyers.
Fixed interest rate – An interest rate which remains fixed for the entire term of the loan.
Grace period – The period of time in which you are not required to make payments on a debt which also does not create any defaults.
Gross income – Your income before any tax or other deductions have been made.
Home loan – An amount of money borrowed for a residential mortgage secured by a primary residence.
Inflation – An increase in the value of goods or services available, causing a rise in the price level of such items.
Instalment – A scheduled payment that a borrower agrees to make to a lender on a regular basis.
Insurance – A form of contract in which an individual or entity receives protection or compensation for specific losses in exchange for a periodic payment.
Jargon – The specialized language of a particular profession, used predominantly in contracts.
Lender – A person or company that supply funds.
Liability – The debts or financial obligations of a person or company.
Liquidate – When a company ends from being unable to pay off its debts.
Loan – Borrowed money that is usually repaid with interest.
Loan term – A lender’s agreement to make a loan on particular terms, including interest rate, fees and charges.
Low doc loan – A loan requiring a lower level of verification documents.
Mortgage – A legal document that pledges a property to the lender as security for payment of a debit.
No doc loan – A loan requiring no documentation of income.
Occupancy rate – Percentage of currently rented units in a building, neighbourhood, complex, or city.
Owner finance – A property purchase transaction where the seller provides the financing.
Personal loan – Money borrowed to meet personal needs.
Profit – The positive gain from an investment or business operation after expenses.
Property – That which is legally owned by an individual or property.
Purchase agreement – A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
Quick cash – Liquid assets including cash on hand and assets readily convertible to cash.
Renovation loan – A loan used to make improvements to an existing property.
Repayment plan – An arranged agreement between a lender and a borrower, made to help the borrower repay installments.
risk – The likelihood of loss or less than expected returns.
Self-employed – An individual who operates a business as the sole proprietor.
Second mortgage – A loan taken after the first mortgage and is secured against the same assets as the first.
Security – A negotiable financial instrument that represents some type of financial value that is pledged as collateral for a debt.
Secured loan – A loan that is backed by collateral.
Settlement – The time when loan and mortgage documents are formally signed and the loan transaction is completed.
Short term loan – A loan scheduled to be repaid in less than a year.
Sole ownership – Ownership of property by a single person or entity.
Term – The period of time during which loan payments are made. At the end of the loan term, presumably, the loan must be paid.
Title – A legal, written instrument that details an individual’s lawful possession of a property.
Trade equity – Equity from a buyer giving existing property as trade for all.
Underwriting – The process of verifying data and approving a loan.
Unsecured loan – A loan that is obtained without collateral.
Variable-rate – An interest rate that changes with the market.
Warranty – A promise or guarantee of services contained in a contract.
Write off – When a loan is not collectible.
Yield – An income return received from an investment.
Zone – An area reserved for specific limited use, often subject to restrictions or conditions.
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In times of need, a bad credit loan can help you see the light at the end of the tunnel.
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