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

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Quasi-Loan

An arrangement where one party pays the debts of another, on the understanding that the total sum of the debts will be reimbursed by the other party at some later time.

Quick Ratio

This is a measure of the cash a borrower can obtain in a short time, and used as a measure of creditworthiness. The ratio of liquid assets to current liabilities

Quotation

A written illustration of the costs of a loan and in its repayment.

R

Ratchet Effect

A household adjusts better to rising incomes than falling incomes.

Capped Rate

The interest rate can vary up and down but can't exceed the maximum capped interest rate.

Variable Rate

The interest rate charged on the loan may vary up or down during the life of a variable rate Secured Loan. The variation is due to market forces.

Real Interest Rates

An interest rate calculated by subtracting the rate of inflation from the nominal interest rate.

Rebate

A broker reduces part of the commission to a client as a promotional offer

Regulated Loan Agreement

Secured loans up to the value of £25,000 are regulated under the Consumer Credit Act 1974 (CCA). This gives a borrower rights which are not available for loans not regulated under Consumer Credit Act. The borrower is sent an advance copy of the loan agreement and has a cooling-off period of 7 days, during which the person arranging the loan is not allowed to contact the borrower, although the borrower may initiate or request contact. At the end of the consideration period, the borrower is sent signature copies of the loan agreement.

Remortgage or Remortgage Loan

A loan taken out by a borrower to replace another one secured on the same property. Normally, this is done to switching lenders and achieve an improved interest rate.

Repayment Mortgage

A mortgage in which you pay off both the loan and interest at the same time. A long-term property loan where the borrower makes monthly interest payments on the loan and payments toward repaying the principal. In the early years most of the payment goes toward covering the interest and less toward the principal. Whereas in later year most of the payment covers the principal and covers the interest.

Redemption Date

The date set by which a redeemable security is due to be repaid

Redemption Statement

The outstanding amount to be repaid on a Secured Loan.

Redemption Yield

The rate of interest at which the total of discounted future payments of capital and interest is equal to the current price of the security

Redundancy Insurance

An type of insurance which gives income protection in the event of job loss but does not cover any form of sickness, injury or disability insurance.

Reinstatement Value

The total cost of rebuilding the property should it be destroyed.

Remaining Balance

The amount of unpaid principal on a Secured Loan.

Repayment Period or Repayment Term

The period over which the borrower must repay the lender.

Repayment Plan

When a borrower falls behind in loan payments a lenders could decide to negotiate a repayment plan as opposed to starting court proceedings.

Repo Rate

The Bank of England base interest rate.

Repossession

The return of good bought on credit, when the purchaser fails to keep up with repayments

Restructured Loan

A loan where new terms are negotiated.

Retention

The amount of money retained by the lender from a mortgage advance until repairs or improvements are completed as specified by the Valuer.

Review of Rate

The interest rate charged on a loan can be reviewed either annually or monthly. This doesn't apply to fixed rate loan during any fixed period.

Right-to-Buy ( RTB )

A term associated with council house tenants who have the Right to Buy their homes.

Refer to Drawer Please Represent

This is written on a cheque by the paying bank to show there is insufficient funds to meet the payment, but the bank believe that more funds will be available soon.

Revolving Loan

A credit facility where the borrower can choose the number and time of withdrawals against their bank loan and any money repaid may be reborrowed in the future.

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