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

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Indemnity Insurance

An insurance contract where the insurer agrees to cover the losses of the insured party. Most insurance contracts are of this form, except life assurance and personal accident where the fixed sums are paid out as compensation.

Independant Financial Advisor or IFA

An intermediaries who looks at the entire financial market before and give advise about investments. They sometimes have access to exclusive deals not available elsewhere.

Individual Voluntary Arrangement

A binding arrangement between creditors and debtors by which the debtors offer the creditors the best offer they can afford. This is done to avoid bankruptcy.

Impaired Credit

Impaired credit loans are specialist products for customers whose credit problems disqualify them from using the standard lenders.

Incidence of Interest Calculation

This is the frequency that the interest and outstanding loan repayments are calculated. If this is calculated every day it benefits the borrower who immediately gain from the reduction in the size of the outstanding loan. So long as the borrower is paying on time, the more often interest is calculated the better. This is a feature of flexible mortgages. When the interest is calculated annually, then the payments made throughout the year have no impact on reducing the amount paid.

Income Multipliers of Multiples

The size of the mortgage that lenders offer is often worked out by multiplying the borrower's income each year by a set factor.

Income References

This is conformation provided by an employer of stated income of the employee who is applying for a loan. Or it is the certified business accounts if borrower is self employed.

Income Protection Insurance or Income Replacement

An insurance policy for getting regular income in the event of illness or redundancy.

Insurance

An arrangement in which a person pays a company to guarantee them compensation if they suffer loss as a result of accidental damage, fire, theft etc.

Insurance Excess

This applies to insurance claims and is the first part of any claim that must be covered by the claimant. Increasing the excess can significantly reduce the premium.

Insurance Broker

A company or person who acts as an intermediary between individuals needing insurance and companies providing it.

Insurance Policy

This document defines the terms and conditions for providing insurance cover against the stated risks.

Interest

The extra amount the lender charges the borrower for a Homeowner or Secured Loan. A lender charges this rate for the use of the loan money.

Interest Arbitrage

Transaction between two financial centres to exploit differences in the interest rates

Interest Charged

The cost of borrowing, expressed as an absolute amount, or as a percentage.

Interest Only Mortgage

A long-term property loan, where the borrower pays interest during the term of the mortgage. The principal is paid for at the end of the loan by some other way.

Interest Rate

The amount of interest that is charged for borrowing.

Interest Rate Cap

An upper-limit maximum rate of interest e.g. on an adjustable-rate loan

Interest Rate Collar

A combination of an interest rate floor and an interest rate cap for the same loan.

Interest Rate Exposure

The risk of loss linked with movements in the rate of interest.

Interest Rate Floor

A lower limit on a rate of interest, for example, on a variable rate mortgage or loan.

Interest Rate Guarantee

A tailored indemnity that protects the purchaser against future changes in interest rates

Insurance Single

Insurance to protect the income of the applicant, so at to protect the repayment of the loan applicant. Split or double insurance to protect the income of the second wage earner.

Term Insurance

A life insurance policy that's often associated with a mortgage or loan. The premium goes towards insuring the borrower's life, and will pay off loan in the event of death. There is no payout after the policy expires.

Insurance Premium Tax - IPT

UK Tax on all general insurance.

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