Common Loan Terms
Cheque cashing
This service is typically an in person service where a person does not want to wait for a bank to clear a cheque and instead uses a third party to exchange the cheque for cash instantly in return for a fee.
Early repayment
This is when you repay borrowed money prior to the arranged due date. Some loans do not allow early repayment, whilst others charge penalty fees for doing this.
Credit Crunch
In today’s world, everyone has heard the term ‘credit crunch’. It is used to describe a sudden reduction in the general availability of credit. It can also refer to a sudden increase in the cost of obtaining loans from banks, although both scenarios usually occur together.
Unarranged borrowing
An overdraft that is higher than your bank or building society has previously agreed to is classed as unarranged borrowing. This is also called an unauthorised overdraft and usually carries large penalty fees.
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