Understanding Jargon

Although we avoid the use of jargon at Performance Finance, there are some occasions we can't get around using it! If you're left feeling a little confused, or perhaps you need a reminder about what take a look through our jargon buster

Arrangement fee

The fee that may need to be paid by the borrower to the lender for taking out an agreement together.

Base rate

The rate of interest that has been set by the Bank of England. This is the lowest rate of interest that lenders can charge.

Credit rating

This is one of the elements that is taken into account during our credit approval process. It factors in your history of payments to assess whether you will be able to manage and pay your debt within the timescales.

Collateral

An item of the borrower's possessions that is to be given to the lender if the terms of the loan are not met.

Early repayment charge

The one-off charge that the borrower may need to pay if  they decide to pay off their loan earlier than the agreed term. This is usually to cover some of the interest the lender will have lost as a result of the early repayment.

Fixed rate

The amount of interest charged by the lender: the value of which is fixed so it will never change throughout the entire term of the loan/finance agreement.

Interest rate

The amount of money the borrower pays back on top of the amount that they have borrowed.

Unsecured loan

This is a type of loan that is obtained without using the borrower's property as collateral.

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