Loan Jargon - a comprehensive reference of loan terminology from i Secured Loans

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, Full List

BACS

Bank Automated Clearing System is an electronic clearing system used by banks and building societies for low-value, repeat items such as direct debits, standing orders and automated credits e.g. salary payments.

Back-to-back loan

An arrangement by two companies in different countries who borrow in each other's currency and repay at specified future date in its domestic currency. Such a loan, often between a company and its foreign subsidiary, eliminates the risk of loss from exchange rate fluctuations.

Bad Credit

Is when a debt is considered to be uncollectable and is written off either as a charge to the profit and loss account or against an existing doubtful debt provision. It's a term to describe a poor credit rating from Credit Reporting Agencies.

Bad Debt Provision

An accounting estimate of the amount of debts which is thought likely to be written off

Bad Debts Recovered

Money which had been classed as Bad Debts and written off that has since been recovered either in total or part.

Balance Outstanding

The amount of a loan that still has to be repaid.

Balloon Loan

A mortgage where the monthly instalments aren't large enough to repay the loan by the end of the term. Consequently, the final payment due is the lump sum of the outstanding principal.

Balance Transfer

Moving the outstanding balance of a debt on one or more credit cards to another card so as to get a lower interest rate.

Bank Card

A plastic card issued by a bank and accepted my merchants as payment for transactions e.g. credit cards and debit cards.

Bank Confirmation

The verification of balances requested by an auditor from a bank

Bank Credit

The maximum credit available to an individual from a particular bank

Banker's Reference

A report issued by a bank on a particular customer's creditworthiness

Bank Mandate

A written order to a bank, asking them to open an account and allow someone to sign cheques on behalf of the account holder.

Bank of England

The central bank of the UK. In 1997 it was granted sole responsibility for setting base interest rates

Bank Overdraft

Borrowings from a bank on a current account which are payable on demand. A maximum limit is normally agreed prior to the facility being available, and interest, calculated daily, is charged on the amount borrowed.

Bankruptcy

A person who has been declared by a court as unable to meet his or her debts.

The condition of being unable to pay debts, with liabilities greater than assets. There are two types
a) Involuntary bankruptcy where one or more creditors bring a bankruptcy petition against the debtor
b) Voluntary bankruptcy, where the debtor files a petition claiming inability to meet his or her debts.
Bankruptcies remain on a credit record for seven years.

Bank of England Base Rate

The rate of interest set by the Bank of England that is followed nearly all lenders and so influence variable rate loans in the UK.

Bank Term Loan

A loan from a bank that has a term of at least one year.

Base Rate

The interest rate at which the Bank of England lends to other banks. This determines the rate at which bank subsequently lend to their customers

Before-tax-income

Total income before taxes are deducted.

Belt and braces man

A very cautious lender who asks for extra collateral for a loan

Beneficial Interest

An arrangement where someone is allowed to occupy or receive rent from a house without owning it.

Benefit Period

An introductory period where the interest rate of a loan is discounted, fixed or capped.

Bilateral credit

This is credit allowed by banks to each other in a clearing system to cover the period which cheques are being cleared.

Bill Discount

This the interest rate that the Bank of England charges banks for short-term loans. This establishes the interest rate that banks charge their customers which is usually a fraction about the discount rate.

Biweekly Loan

A loan that requires payments every two weeks.

Body of creditors

The creditors of an individual or company treated as a single creditor in dealing with the debtor

Bridging Loan

A temporary loan providing funds until further money is received e.g. for buying one property while trying to sell another.

Broker

A Broker is an intermediary who offers loans and insurance policies.

Brokerage rebates

The percentage of the commission paid to a broker which is returned to the customer as an incentive to do more business

Brokered market

A market in which brokers bring buyers and sellers together.

Broker loan rate

The interest rate that banks charge brokers on money that they lend for purchases on margin

Building Society

A financial institution that offer interest-bearing savings accounts, the deposits are reinvested by the society in long-term loans, mainly mortgage loans for buying property.

Bullet Loan

A loan that has specified payments of interest until maturity, when the principal is repaid.

Buy and hold

An investment strategy based on retaining securities for a long time

Buyer's market

A situation in which supply exceeds demand, prices are relatively low, and the buyers have an advantage

Buying economies of scale

A reduction in the cost of purchasing raw materials due to the increased size of the purchase.

Buy-to-let mortgage

A loan you take out to buy a property that you intend to rent to tenants.

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, Full List