Glossary > The Letter D

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The Letter D
Saber Finance know the finance world is full of terms, phrases, buzz words and jargon.

On this page we explain,
Debit Cards > Debt Consolidation > Debt Management Services > Debt Counselling > Deed > Defaults > Deferred Interest Mortgage > Deferred Period > Deposit > Depreciation > Direct Debit > Discounted Rate Mortgage > Draw Down Facility > Duty of Disclosure

Debit Cards
Debit cards take money directly from the holders bank account. Debit cards are not credit cards but are an alternative to cash or writing a cheque. Linked to your bank account, debit cards often also work in cash machines and as a cheque guarantee card. When using a debit card for a purchase money will be shown withdrawn from your account in a few days.
Switch and Visa operate these schemes for the banks. Generally using these cards do not cost extra as they come with your account although this could be dependant on you remaining in credit.
There is a section on consumer credit for interested visitors.

Debt Consolidation
Debt consolidation is the term used to describe placing all existing debts and arrears together and arranging fresh finance to clear or repay them, which then leaves only the latest finance left to be repaid. Debt consolidation or simply consolidation as it is may be referred to, is currently one of the finance industries large growth areas, companies charge customers varying amounts to manage debts, contact creditors, arranging loans and then using the finance to pay of the outstanding debt.
Companies that offer this debt consolidation service generally make their profits from the money saved by offering creditors an early settlement to any debt owed and from arranging and collecting repayments on the new loan.

You don't have to pay debt management companies for this service, it is possible to arrange a loan and consolidate your debt yourself.
We have a section on consolidation for visitors interested.
We also have loan tools available if you want to apply for a loan to consolidate with.

Debt Management Services
Debt management services are agents or companies used by people with debt repayment problems or those seeking to reduce the financial burden upon them from debts. They are often used by customers seeking to consolidate their debts.
If you have many debts and are frequently receiving notices from lenders, there could be a genuine need to deal with your debts and the creditors before the situation gets beyond your control. This is especially so if you have assets, or some of the finance is secured. When in such a situation you either need to deal with your creditors yourself, or get someone to do it for you.
Debt management companies deal with many of the mentioned scenarios every day, and thus are experienced and knowledgeable in how to deal with any mixture of debts. They work by contacting your creditors to arrange reduced payments perhaps in return for longer terms. They should be able to help you come up with a budget plan to assist you make your payments on time and if there are problems contact the lenders on your behalf. And if you are consolidating debt should be able to assist you applying for loans and clearing your debts.
Try our consolidation section for more information.

Debt Counselling
If you are having difficulty managing your money, you may be considering loan consolidation. By taking out one loan to cover all your existing debt repayments, you can simplify your finances, but you should be careful you don't end up even deeper in debt. The rates and fees charged by consolidation providers can be much higher than those available from high street lenders. Such finance may also come with expensive payment protection insurance.

Problems with Finance?
If you are finding money matters a struggle and you would like some help, there is free help available. Organizations such as the citizens advice bureau, national debtline or the consumer credit counselling service can all provide help and assistance to you. To find them you could use a local directory or search for them on the internet.

Deed
A deed is a legal document. A deed has been not just signed, but signed and witnessed, with a seal appended and formally handed over. A deed has special significance in law, for example, a conveyance has no force in law unless it is in the form of a deed. Title documents to both freehold and leasehold property may only be transferred by a deed.

Defaults
The term defaults is used to describe late or even missed payments that are due on any financial products taken out. If the borrower stays behind and thus in arrears on their repayments and ignores the lenders attempts at contact, they are likely to end up with a CCJ against them. The CCJ will adversely affect any further attempts to gain finance, and could lead to them being turn down on any further applications because of the problem rating. Defaults on mortgages or finance secured on property may mean that property is in danger of being repossessed, sold and the money used to pay off any arrears owed to the lenders. Defaults can also be described as current outstanding arrears.

If you are finding difficulty with repayments contact the lender of the finance product immediately, this can reduce the charges for defaults and working together a repayment schedule could be arranged. This would be tailored to your current ability to pay and thus reduce the possibility of creating further defaults. Most finance lenders have departments or sections that can assist their customers with this.

Deferred Interest Mortgage
This is a mortgage package where not all of the interest due is paid in the early years. This interest is then added to the outstanding mortgage balance. As a result the borrower will end up owing more than the initial mortgage amount.
Deferred interest mortgages are usually marketed at times of high interest rates to young professionals whose salaries are expected to increase rapidly or whose jobs carry the reward of large bonus payments.

Deferred Period
Deferred period is a term come across within insurance products, during their claim procedures. Deferred period is the length of time which must pass, before a claim or benefit is paid, after an illness or injury has been diagnosed and reported to the insurer. The insurance policy will have this period defined in its terms and policy holders should be aware of this and any other conditions that affect claims procedures.
Interested in insurance cover? Then try our insurance tools.

Deposit
The deposit is the advance made on the purchase of a property and is also a factor in the size of the mortgage required by the buyer. How this works is very straight forward, if you have saved 15% of a properties value as a deposit you will then require a mortgage for 85% to cover the remaining cost. The size of the deposit the buyer should be looking to provide is about 10% of the properties value, this figure should then enable buyers to avoid some of the steeper charges involved in property buying. Plus lenders should be more inclined to grant mortgages when a larger deposit is present.
There are 100% mortgages available for those who want them, but generally lenders prefer to grant these to buyers with perfect credit ratings. The main expense of choosing these one hundred per cent mortgages is the extra interest charged on the mortgage and the larger mortgage indemnity guarantee premium (MIG) required. On mortgages over 95% of a properties value the MIG premium is usually quite substantial.

When buying property as well as the mortgage and deposit, there are other legal costs to take into consideration when buying property and these can easily be over looked when saving up, there is a mortgage section for those interested.

Depreciation
When you buy a item or asset for personal use or for your business, it will get old and over time lose its value. In other words, the asset is falling in value over time.
This depreciation needs to be accounted for when arranging finance to help fund it's purchase.
For example, if you are arranging a personal loan to buy a new car, you should take account of the loans cost, your ability to pay and the depreciation of the vehicle itself.
It makes no sense if you keep the car for three years only to have another two years left paying off the loan.
Try the loan search directory for a personal car loan.

Direct Debit
Direct debit is an arrangement for payments to be made to a third party on specified dates form your bank account. Set up by you with your bank, the receiver is responsible for organizing the deduction from your account. Direct debits are safe because, your bank will repay you if it allows an incorrect payment to be made. They also free you from having to remember to make payments or visit premises to make these payments, all you have to do is ensure sufficient funds are in your account.
Companies which provide regular services like direct debits because they are cost efficient to run. So expect your mortgage lender, telecom company and utilities suppliers to encourage you to use direct debit to make payments.

Discounted Rate Mortgage
A discounted rate mortgage is a mortgage product which offers a safety incentive to the customer. This means the interest that is charged on the mortgage is at the standard variable base rate and is applied to the mortgage, less the pre-arranged discount for a set period.
This means the interest rate and the monthly mortgage repayments will go up or down depending on the base rate changes minus the discount. This gives the holder of the mortgage a level of security over their repayments as they will not be paying interest at the premium level. This safety will remain in place until the end of the discounted rate period. The period usually attributed to discounted rate mortgages is about two years but it could be more which is dependant on the mortgage lender.
These discounted rate mortgages tend to lock the holder into the mortgage for a minimum limited period and usually include a penalty clause if they try to swap lenders, which can increase the cost of re-mortgaging.
After a mortgage? Try our mortgage tools, and save time searching online.

Draw Down Facility
A draw down facility is an option available with flexible mortgage products, the lender will allow you to access funds out of your mortgage account during the mortgage term. This usually requires you not increase the size of your borrowing over the mortgage advance.
As a borrower it means you have access to limited finance, without having to resort to a remortgage. Draw down facilities can also be applied to self build mortgages.

Duty of Disclosure
A duty of disclosure is often encountered when you complete an insurance proposal form. Insurers can not verify everything you write down on your application, it is impractical and just too costly to do so. Equally, they have no way of knowing if you are lying or forgetting to disclose information. Instead, they ask that you tell them anything else that may affect their assessment of your insurance application. This puts a duty on you, to be honest and revealing of any facts relevant to you application. Any failure to do so could invalidate your policy and leave you un-insured.
Interested in insurance cover? Then try our insurance tools.

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.