Glossary - Secured Loans

Secured Debt
A secured debt is one that is backed by collateral such as a property or a car and it does not pose much risk to the lender.

Secured Loan
Such loans are secured against an asset such as a property or a vehicle and the borrower could lose the asset if they do not keep up with the repayments.

Unsecured Debt
This debt is not secured against any asset

Unsecured Loan
Individuals receive unsecured loans based on certain criteria. These loans pose a risk to the lender, therefore the interest rate would be higher than that of a secured loan.

Term
The period over which you pay off your loan or mortgage.

Loan
A money advance, given over a specified period that requires regular repayments.

Personal Loan
Individuals take out personal loans that have fixed interest rates and a number of repayments. Lenders use these loans for anything they see fit.

Security Address
Your financial institution needs a security address to guarantee a secured loan.

Tenant Loan
These loans are unsecured and almost any tenant, even those with arrears may apply.

Early Repayment Charge
Early repayment charges, also sometimes known as a settlement charge, are applicable if a loan or a mortgage is repaid early.

Joint Loan Agreement
More than one person shares a single loan agreement.

Joint Liability
Both parties are liable for a portion of the relevant loan/mortgage.

Security Address
Your financial institution recorded this particular address for your secured loan.

Base rate
The lowest rate at which a lender will charge you interest. The Bank of England's Monetary Committee sets the rate.

Interest rate
The percentage rate at which interest is charged on a loan, or paid out on savings. The rate will vary according to the base rate and the type of loan or savings plan.