Loans Jargon Buster

Loans terms – top 20

APR

The Annual Percentage Rate is the rate you will be charged on your loan over the course of a year. It takes into account the interest you pay, how often you make repayments, and any other additional charges such as any processing fees.

Collection cost

An extra charge if you fail to make any monthly repayment on the due date. If you are having trouble repaying your loan, these costs can quickly mount up so you may want to spread out the repayments to decrease your monthly obligations - although this will increase the overall cost of your loan - or speak to us to see if we can help you.

Consolidation loan

A loan that allows you to pay off several debts such as your credit card bill, store cards and personal loan and leave yourself with just one monthly affordable repayment. Consolidation loans can make your monthly finances easier to manage and reduces the risk of running up collection costs however the interest rate may be higher than some of your existing debts. There are other options available and if you are having trouble paying off your loans, we have a Debt management for reducing your debts.

Credit rating/Credit history

A system used by banks and finance companies to assess applications for loans. Your credit rating is based on information in your credit file and on the information you give about yourself in your application. Your credit file will include information from the electoral roll, details about any County Court Judgments (CCJs) or bankruptcies in your name and details of your existing and previous credit arrangements (such as credit cards, loans and mortgages) held in the last six years. We may also contact external credit rating agencies if we need further information. We try and make the system as transparent as possible and we also have a dedicated page with Your credit rating . If you have been turned down for a loan, it's a good idea to read through these suggestions before you apply again.

Early repayment fee/Breakage fee

A charge applied for paying back your loan partially or in full before the end of the loan period. You may find that your income has increased, your spending has dropped or you have received a windfall, for example a bonus, and in these cases it's tempting to pay back more than the required repayment but some providers may charge you extra for doing this. Make sure you understand all the loan conditions when you apply.

Eligibility criteria

All our loans are dependent on your personal situation. Certain products, like Barclayloan Plus, Graduate Loan or Professional and Career Development Loan, are only available to those in certain circumstances. We make the eligibility criteria clear on our loans pages, in our branches and on the telephone.

Homeowner loan

A secured loan that offers you large sums at a low interest rate but requires you to use your home as a guarantee on your repayments. Homeowner loans can be useful for consolidating smaller debts into a single affordable loan with one monthly repayment or if you want to improve your home. We make the eligibility criteria clear on our loans pages, in our branches and on the telephone. You should always think carefully before taking out a homeowner loan as you risk losing your home if you cannot meet your payments.

Interest holiday

A break from paying interest on your loan. We offer interest holidays on our Professional and Career Development Loan which means you don't have to pay any interest while you're studying and for up to one month after the end of your course but we will continue to add interest to your account during this time.

Payment Protection Insurance

An optional insurance policy that could cover you if you can't meet further loan repayments due to involuntary redundancy, illness, accident or disability.

Pre-selected loan

You may already have been selected to be able to borrow a set amount based on your account activity and credit rating. Why not check the pre-selected offers link on your Online Banking page, ask in your branch or talk to one of our agents on the phone? You should always ensure that the loan is affordable to you.

Professional and Career Development Loan

A Government-sponsored scheme that will cover your interest payments while you study and for up to two months after you finish your course. If you would like to take up full-time, part-time or distance learning studies to improve your career prospects but are worried about the costs, we may be able to offer you a Professional and Career Development Loan.

Repayment holiday

A rest period from repayments, usually for a period of three months to a year. Generally the interest will keep adding on during this period but it will give you a much-needed break if you're having trouble meeting your repayments. Our graduate loans come with an option of a holiday at the beginning of the loan to give university leavers a chance to find their feet while they look for a job. We also offer a capital repayment holiday on our business loans. Again, this will give you some breathing space at the beginning of your loan period but we will continue to add interest to your account during this time. If you feel you could be in financial difficulty, speak to us to see if we can help.

Secured loans

Secured loans, which usually come in the form of homeowner loans, allow you to borrow more money over a longer amount of time, giving you lower affordable monthly repayments. To get these terms, the loans need to be secured on something you own, such as your home. This means that your property may be at risk if you do not keep up your repayments.

Unsecured loans

Unsecured loans are available if you don't own your home or don't want to secure a loan on your property. These can be organised simply online. In fact if you're already an Online Banking customer, why not check the pre-selected offers section on your homepage to see if you've already been selected for a loan? You can also check out our loans in one of our branches or over the phone. You should always ensure that the loan is affordable to you.