Glossary > The Letter A
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The Letter A
Saber Finance know the finance world is full of terms, phrases, buzz
words and jargon.
On this page we explain,
ABI > Ability to Pay > Added to Loan > Adverse Credit > AER > Affinity Card > APR > Arrangement Fees > Arrears > Application Form > Apportionment
ABI
Association of British Insurers, or the ABI, are the trade association to which most UK insurance companies belong. One of its functions is to monitor quality and decide common areas of interest so that minimum standards of customer service can be maintained.
We have an
insurance tools page for visitors searching for cheaper insurance.
Ability to Pay
The term ability to pay means simply just that, before borrowing finance you should check you have a sufficient income to meet its repayments. A simple way to ensure you have sufficient income to meet your obligations is to compare your outgoing expenses against your incoming. If you have more coming in than is going out, will the difference cover the cost of the finance you are considering applying for.
When agreeing to an application the lender is taking a risk that the information you provide is accurate and that you will repay your end of the obligation. When you apply for finance your obligation is to provide honest information about your situation and this includes your ability to pay the repayments on time and in full.
If you are after finance we provide a selection of
finance tools and application forms where you will not be turned away because of problem credit.
Added to Loan
Added to loan relates to the costs borrowers face when arranging finance such as a mortgage. These costs are added to the overall amount being borrowed. The costs may include items such as indemnity fees, arrangement fees and administration fees.
Adverse Credit
Adverse Credit is a term used to describe a low rating in credit scoring due to a poor credit history. County court judgments, mortgage defaults, loan arrears or other credit repayment problems lay on the financial record and may lead to a poor rating. Moving frequently and having a poorly rated job can also hurt credit scores as also can not being on the electoral role.
Credit scoring is used by lenders to determine the level of risk you are before agreeing to lend fresh finance. Your credit history and suitability will be on one of several national credit databases but it is up to the individual lenders whether the risk you present is acceptable.
You can find finance to suit your score even if you have a problem credit rating, there are plenty of lenders who specialise in lending to people with adverse credit ratings, you just need to spend the time finding them.
After finance? we provide a selection of
finance tools and application forms where you will not be turned away just because of problem credit.
AER
Annual Equivalent Rate, or more commonly referred to as the AER, is a rate generally quoted on the interest paid on savings or investments. Used in advertising products it demonstrates what the return would be if the interest was paid annually.
Most interest earning savings accounts quote an AER, allowing you to compare the return you may expect to get. Remember however that the AER is only a notional rate and will not necessarily reflect the cash return you will receive.
Affinity Card
Affinity cards operate like ordinary credit cards. However, they are linked to a particular good cause, which may or may not be charitable.
Some charities offer cards operated by credit card issuers, that make a small payment towards the charity each time you use the card. There could also be a donation when you initially take the card out.
Interested in finding a new credit card? we have some
credit card tools.
APR
APR stands for annual percentage rate and means the total cost of any finance taking into account all the costs, interest charges and arrangement fees. The APR is usually expressed as a percentage amount and means repayments with a higher rate will be greater than with a lower rate.
Showing the APR is a legal requirement and all lenders of finance must make it clear what it is for their financial products. This makes rate surfing easier as APR is a clear indicator for you to compare products from one lender to another.
The actual rate you are charged could vary not only with individual lenders but also based upon your credit rating.
Arrangement Fees
Arrangement fees is the term used to describe the charges from lenders to cover any setting up costs that finance products generate. Fees are charged for most UK finance products including loans, mortgages, insurance, credit cards and consumer credit. The actual amount charged can vary greatly from lender to lender and is dependant on the financial product, and can be used as a valid way to compare lenders.
Lenders charge fees for setting up mortgages for customers to cover any work involved in arranging the mortgages. This will then be included in the over all amount lent for the mortgage, although this is a standard practice some lenders do advertise mortgage products where the fees are waived or cancelled to attract new customers.
When buying property there are other legal costs to take into consideration and these can easily be over looked when saving up, we have a
mortgage section for those interested in more information.
Arrears
Arrears is the term used to describe missed or late payments that are due on financial products. If borrowers stay behind and thus in arrears on repayments they are likely to end up with a County Court Judgment (CCJ). This will certainly adversely affect their credit status and make any further applications be viewed less favorably than before.
Arrears can also be described as defaulting.
If you are finding difficulty with repayments contact the lender of the finance product immediately, this can reduce charges for arrears and working together a repayment schedule could be arranged. This would be tailored to your ability to pay and thus reduce the probability of creating further arrears. Most finance lenders have departments or sections that can assist customers with this as arrears and defaults are part of financial life.
Application Form
Application forms are a written application for finance products in the guise of a form so all the relevant information can be viewed easily. Most financial needs can now be sorted online, and the amount of information required for each application will vary greatly from site to site.
To complete one of our online finance application forms, click on one of the navigation links or visit our
finance tools or application forms page.
Apportionment
Apportionment is one of the often forgotten costs of home buying.
Apportionment is the sharing of specific costs between buyers and sellers of property.
When buying property you should make sure you only pay for the buildings utilities during the period in which you occupy it. These charges need to be shared between the buyer and seller of a property. In that way each party pays their fair share on the date the properties sale is completed.
The person doing your conveyancing will sort this detail out.
Apportionment can also be a term you come across when you become a unit-holder and buy a flat with shared common areas. Any costs involved in the upkeep of the shared areas is financed between the unit-holders.
Want to buy your flat and become a unit-holder, use our
mortgage comparison table to find great deals from lenders.
If you are in any doubt about any financial product or term we recommend that you seek advice from a financial advisor.
If you're after Finance Information, Saber Finance is here to help.