Glossary > The Letter L

A >B >C >D >E >F >G >H >I >J >K >L >M >N >O >P >Q >R >S >T >U >V >W >X Y Z

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

On this page we explain,
Leasehold > Liabilities > Life Insurance > Loan Insurance > Loan Security > Loan Term > Local Authority Search > LTV > Loyalty Card

Leasehold
Leasehold means that a particular property is owned rather than rented but often the land on which that property is built is not owned directly by the properties owner, but instead is held under a lease for a set number of years. When the lease expires, the property returns to the freeholder, that is the person or business that holds the deeds to the land. Shops, business premises and flats are commonly sold on a leasehold. Leasehold properties range in duration from between six months to nine hundred and ninety nine years.
A property on which the leasehold is running down and will revert to the freeholder can find that its market value is being adversely affected. Leasehold is in direct contrast to freehold where the ownership is absolute.
The lease will set out the details of the agreement like the rent and other obligations such as repairs and access rights.

Liabilities
Liabilities refers to all the financial commitments currently held by a person. Liabilities will include products like any credit cards, personal loans, maintenance payments, mortgages, hire purchase and any other credit owed.
Lenders take these existing liabilities into account when they are evaluating your application for any additional finance.
For example, you may want to take advantage of a sale and purchase some item. Not having sufficient funds ready, you decide to apply for a personal loan. The lender will want to know of your existing liabilities to ensure you are capable of repaying on time and with out any defaults.
Searching for a personal loan? Try using the tenant loan best buys, and save yourself some time searching for lenders online.

Life Insurance
Life insurance is protective cover against the threat of personal injury or death. With most people their family and their health is the number one priority. Life assurance is insurance cover that insures the most important thing of all loved ones futures and eliminating their financial hardships. There are many types of life insurance products, with many different benefits. Take the time to study the policies available to see if it suits your needs and requirements.
Taking a break from a career for example, to study or raise a family, some life insurance policies will allow you to suspend the payments, and then restart them later without incurring penalties. Being able to reduce the level of cover may be attractive, when starting new employment to free up funds.
Insurers and their policies can be found on our insurance tools page.

Loan Security
Loan security is a guarantee for lenders to assure them that if the borrower defaults they will have an avenue to pursue when attempting to recover the debt. The guarantee is usually something that retains it value over time such as property. When a loan is applied for the lender may ask for protection for the loan before agreeing to lend the finance. The security, usually the borrowers home, could be seized and or sold in the event of the loan being defaulted on or simply not paid and attempts at contact ignored. Since this process involves the courts, customers will be given ample opportunity to repay their arrears or arrange to pay them subject to agreement with the lender.

Tenant loans or unsecured loans, are not linked to any underlying security, such as property, meaning that the lenders have to pursue their customer in the county courts to recover debt in the event that they fail to repay the loan or default.
Homeowner or secured loans, are protected by being secured on an already mortgaged property. With the secured home owner loan, the property may be at risk of being seized and sold if borrowers do not keep up with repayments. How much the sold property makes has nothing to do with the value of the property since the courts may insist on a quick sale. The finance raised will then be used to repay any outstanding creditors.
Try our personal loan tools if you are searching for individual finance.

Loan Insurance
A loan lender may offer you or insist you take out an insurance policy alongside a loan to cover the loan repayments. In the event of an inability to make the repayments, either through death or loss of earnings, the insurance will cover the payments during the illness.
Loan insurance is not cheap and can add a substantial amount to the cost of your loan. It is possible that an good interest rate deal may end up costing you more because of the loan insurance charge. Some lenders insist on loan insurance for their borrowers with an adverse or problem credit.

Loan Term
Term is the period of time over which finance borrowed is to be repaid. Many finance products come established with terms already arranged, however other lengths of terms may be available subject to individual circumstances and with the consent of the lender.
The length of personal loan terms can vary widely.
When a loan has a short term the monthly repayments could be substantial in size, although this does mean that the total interest paid for the loan will be lower.
With a personal loan with a longer term, monthly repayments could be smaller in size and easier to manage, although this means that the total interest paid for the loan will be higher and thus the loan will cost more in total.
Want to compare loan lenders? Use the loan search directory to compare their rates.

Local Authority Search
When you are buying a property the conveyancing process is carried out by your conveyancer, this is usually a solicitor. The local authority search is based on how your local council's services may affect the property and its surrounding. Such as proposed road improvements, and details of any planning permission given for the property or nearby property which may overlook your building. The search will only take in the immediate vicinity around the property and the results will only be current for a limited time, which is worth noting if the process of home buying is taking a long time.
For more info on property buying try the mortgage information page.

LTV
LTV is short for loan to value. The loan to value is typically given as a ratio expressing the size of the mortgage as opposed to the market value of the property. Lenders better deals on their mortgage products may only be available if you are borrowing less than a set proportion of the value of the property.
Mortgage lenders offer far more favourable deals if you are contributing a sizeable deposit towards the property and are wanting to borrow a smaller amount for a mortgage in return. This means a less risk to the lender of a large unrecoverable debt.
The loan to value ratio only really comes in to play in a flat or falling property market. The mortgage lenders could begin to worry about being left with a hard to sell property should the borrower fall behind with their repayments. Indeed, if the housing market and their prices fall far enough, they could be faced with having to sell the property for less than the remaining amount of the mortgage.
First time buyer? Try the mortgage search directory and find deals on a mortgage.

Loyalty Card
Loyalty cards are a plastic card that rewards its holders for shopping at a particular shop or chain of stores. Loyalty cards can not be used to draw cash as they offer no line of credit to their holders, so they can not be used to make purchases and you can't run up a balance the issuers can charge interest on.
Some loyalty cards offer money off particular ranges of products, so if you buy those items you will save money. This can create a two tier pricing structure where customers can be punished for not carrying the loyalty card, but where you are rewarded for using them. If you shop regularly at a store it makes sense to carry the loyalty card but be aware it does not mean that store will always be the cheapest.
More information can be found on our consumer credit pages.

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.