Money Jargon - The Letter C
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Money Crocodile knows the finance world is full of terms, phrases, buzz words and jargon. The below terms will help you with terms beginning with the Letter C
On this page we explain,
Capped Mortgages > Capital > Capital and Interest Mortgages > Cash
Back > Car Insurance > Car Loans > Career Loan > CCJ > Capital Gains Tax > Charge Card > Cooling Off > Common Hold > Consolidation > Contents Insurance > Conveyance > Creditors > Credit Cards > Credit Check > Credit Facilities > Credit Scoring > Credit Unions > Critical Illness Insurance
Capped Mortgages
A capped mortgage is a variable mortgage product with built in repayment size protection. They are is ideal for those who would like to know the most they will ever have to pay each month for their mortgage, but at the same time wish to benefit by paying less if interest rates fall.
The loan has a maximum interest rate over which you will not be charged for a set period. However, if the lender’s variable rate falls below the capped rate, your interest rate also falls.
The advantages of the capped rate mortgage is that when interest rates are likely to rise, they offer protection for borrowers against repayments going over a certain level as they a top ceiling rate at which the mortgage stays under for an agreed period. Having a capped rate mortgage can make it easier to budget when you know what the highest amount your mortgage payment could be. Remamber a capped rate can also allow you to enjoy the benefits of any cuts made to the lender's standard variable rate (SVR). Whilst providing peace of mind capped rates are generally more expensive than fixed or discounted rate products.
Capped rate mortgages have an interest rate that is set for anything from a few months to several years.
The cons of a capped mortgage is the agreement ties the holder into the deal with penalties being charged for leaving early which makes re-mortgaging more expensive.
Capital
Capital is another term for the finance amount. the actuall amount outstanding that you owe. With reference to mortgages it is used throughout the term of a mortgage to describe the amount outstanding that you owe, excluding costs and interest.
When borrowing other finance from a lender, the capital is the original amount borrowed, excluding any interest charged or fees incurred.
Capital and Interest Mortgages
A capital and interest mortgage is a mortgage product where the customer repays the capital and any interest charged simultaneously. Capital and interest mortgages are more commonly known as repayment mortgages. The monthly mortgage repayments to the lender goes towards paying back both the actual money borrowed, and any interest the lender charges.
Repayments on these mortgages can be affected by any fluctuations in the base rate if the lender passes them on. The capital and interest mortgages (repayment mortgages) are among the most popular mortgages taken out in the UK.
Cash Back
Cash back is a financial reward lenders offer for using their companies product. The cash back given by a lender for taking on a finance product relies on the capital amount and the type of product taken. For example cash back on a mortgage could be used to help pay for the deposit or for improvements to the property. Cash Back offers are good marketing gimmicks, as companies are seen to be offering their consumer a good deal. Although in reality the borrower may find that they will eventually pay back the reward they were given with their repayments as cash back is usually added to the total borrowed.
Car Insurance
Whatever the motor you drive, there is no escape from paying for insurance, it is a legal requirement for all drivers to be covered by car insurance before you can take to the roads.
Car Insurance Policies
There is three main types of vehicle insurance available in the UK, make sure you apply for the cover that is best suited to you.
- Third Party Only.
- Third Party, Fire and Theft.
- Fully Comprehensive.
Third Party Only
This is the bare minimum allowed by british law and is very limited in its scope, covering the policyholder only for the cost of damage to a third party’s property or bodily injury to a third party. It does not cover the policy holders car or themselves, so any damage to the policy holders car will have to be paid for by themselves.
Third Party - Fire and Theft
This is basically the same as third party only but with the addition of cover against your car being stolen or catching fire.
Fully Comprehensive
This is the most protective option with cover offering protection against not only third party claims but also first party protection with car and passenger cover in the event of an accident regardless of fault. This type of cover can include legal protection and may also include a guaranteed courtesy car should yours be off the road as the result of an accident.
it is worth noting that individual car insurance policies vary according to many factors. These factors include the type of cover you require, the car you wish to insure, the contents you wish to include in the policy, plus information about you yourself.
You can help lower your insurance quote if your motor is kept in a garage overnight or in a secure compound while you work. Fitting an alarm or security devices such as an immobilizer can dramatically effect quotes also. Wanting a courtesy car and quick repair assistance could in fact increase policy costs. The simpler you want to make your policy the cheaper it will work out to be.
Car Loans
If you are looking to buy a new car then maybe you require finance to be able to make that purchase. Buying from a forecourt dealer means that you will probably be offered the choice of a loan whilst viewing or test driving the vehicle,
Think very carefully about using these credit facilities. Personal loans arranged prior to visiting the dealership can work out to be far more competitive and you won't feel pressured into the purchase.
Need a loan to help purchase a new car? Well, you will want to find the best loan
for you.
Career Loan
A career loan is a loan which enanbles the change of or improvement to a career. It can improve your employment prospects and change your life for the better.
If you are attending interviews you want to look your best and give a good impression, a loan would enable to to buy a new suit, shoes even get a good hair cut goes along way to creating a dynamic impression of yourself.
Perhaps you're interested in a change of career but are concerned about bills while you're retraining? An event loan could help you bridge that gap until you're up and earning again, you would be able to earn more after you aquire the skills.
You may be starting back to work after having kids but have found the skills in your job have moved on. Maybe you need some retraining or a quick refresher course, a loan could help you get back up to speed as far as your career is concearned.
CCJ
CCJ or County Court Judgement. A CCJ is the result of a court ruling against a person for the non payment of a debt or debts. If you default on loan or finance repayments then the lender will try to contact you, should you ignore the attemps of your lender then they will probably choose to take you to court, in order to recoup the debt you owe them. If the debt still is not satisfied a judgement can be brought against you in a County Court, otherwise known as a CCJ. If the debt is later paid or satisfied and a satisfaction certificate obtained it will be noted on the borrowers credit file. Obviously it is better for the borrower if the debt were to be paid within a stipulated time, as this may even serve to cancel out the adverse effect of the CCJ.
Capital Gains Tax
If you buy an asset or investment then later dispose of it for more than you paid for it, you are said to have made a capital gain. If you make many gains in one particular tax year you may find that you willl be liable for capital gains tax.
Charge Card
A Charge Card resembles a credit card. Accounts with charge cards insist you settle any balances in full each month. Charge card issuers operate penalty interest charges which are significantly higher than credit card interest rates for failure to pay the balance outstanding on time.
Cooling Off
A "cooling off" period is defined as the length of time allowed after signing an agreement, to change your mind and cancel, so long as you cancel within this predetermined cooling off period you will not incurr any financial penalty.
The actual duration of the cooling off period is dependant on the type of agreement signed and may vary from company to company.
Common Hold
Commonhold is a fairly new way of owning property such as a flat, shop or office. It is an alternative to long leasehold ownership of shared property.
In a block of flats each flat is considered a unit, and each one of these units can be brought by a different individual, called unit-holding. The shared or "common" areas are then managed by a common hold association, which only the unit-holders may be members. The management and upkeep of the shared areas is usually financed by an apportionment between the unit-holders.
Consolidation
Consolidation is a term used to describe the placing of existing debts together and arranging fresh finance to clear or repay them. By placing all outstanding existing debts together and taking out a single new loan to repay all those debts, you would leave yourself with just the one single and more affordable repayment to make each month. Consolidation or debt consolidation as it is more commonly referred to, is currently a large growth area, and there are companies who charge customers varying amounts to manage their debts. These companies charge for various services such as contacting creditors and arranging loans. Companies that offer this consolidation service generally make their profits from the money saved by offering creditors an early settlement to any debt owed.
You don't have to pay debt management companies for this service, it is possible to arrange a loan and consolidate your debt yourself.
Contents Insurance
Whether you own your own property or not you should always consider taking out a contents insurance policy. If you rent a property then you still want to know that your personal belongings are safe. Contents insurance also covers items such as furniture, carpets, curtains, electrical goods and many items which may be removed from the home. Contents insurance is separate from buildings insurance, and is a must have, as the cost of replacing lost or damaged items if the unthinkable happens would probably be large.
Conveyance
A conveyancer is a professional who assists in the legal transfer of property.
Creditors
Creditors is the term used to describe those individuals or companies that a person owes money to, it could be a loan or mortgage. Whatever the finance is that you have borrowed you will inevitably have to make repayments untill the debt is fully repaid. Repayments are usually arranged on a monthly basis and the creditor will expect the repayments to be on time. If payments they are not received on time and you fall behind or miss payments then your creditor can take legal action against you.
If you are made bankrupt or have possessions seized because of non payment of debt, those possessions may be sold and any revenue raised could be used to pay back those you owe, your creditors.
Credit Cards
Credit cards are a finance product that is used to access credit, of which the amount available is pre-arranged, it is a plastic card bearing an account number assigned to a cardholder with a credit limit that can be used to purchase goods and services and to obtain cash disbursements on credit, for which a cardholder is subsequently billed by an issuer for repayment of the credit extended at once or on an installment basis. Today there are plenty of credit cards to choose from, the most recognised bear the Visa and MasterCard symbols.
Credit cards issuers make money by charging interest on any finance used by the holder of the card. If the card holder does not repay in full the outstanding balance incurred on the card each month then the card issuer will charge interest on the amount outstanding. The annual percentage rate or APR is used when calculating the interest rate charged on a credit card. So the higher the APR the higher the repayments, the lower the APR, the less the repayments will be.
Credit cards allow you to spend whenever you want, regardless of what's in your bank account and they provide flexibility and convenience, especially for times when you may be away from home.
Credit Check
A credit check is the process by which a persons financial history is compared against a scoring system, before any future finance is granted.
A persons credit history is stored on a national database and lenders can examine that history when required. Many factors and criteria are taken into account during the process of determining whether or not to grant finance. This criteria include the length of time at the current address, security, employment, income, marital status, age and credit score. The credit check will reveal if there is an adverse rating based on poor debt repayment history. This means that arrears, late and defaulted payments, missed payments and any CCJ's, will all result in a lower rating.
A low credit may result in your application for finance being turned down by mainstream lenders. There are loan providers online that specialise in lending to people in this situation.
Credit Facilities
Credit facilities are put in place by businessses, shops and establishments, basically establishments have the means to process their customers applications for finance. Credit facilities are a form of consumer credit.
When shopping for goods or services you may find you are unable to pay the full bill immediately so you may decide to pay the outstanding amount on a credit card, or choose to use the stores or establishments own credit facilities.
Acceptance to the establishments credit finance products will still be dependant on your individual credit history and status.
You do not have to take the credit facilities made available by any shop or establishment, you could find out how much the item will cost and then go away and arrange your own finance to pay for the goods. It is possible to save hundreds of pounds in the long run.
Credit Scoring
Credit scoring is the process used by lenders during the credit check. The credit history of the applicant is examined, any borrowing and repayment history is looked at and points are scored. Lenders always perform a credit check before agreeing to grant any future finance and many factors and criteria are taken into account on the credit check. The particular criteria and factors favoured by individual lenders are not disclosed but the check will reveal if there is a low credit rating based on poor credit history. Lenders are able to asses what risk they would be taking should they decide to grant the applicant finance. A low or very poor credit score may result in you being unable to get any further finance.
Credit Unions
A credit union is a group of people, organisations or businesses who have got together and raised some capital which they then lend to borrowers who are amongst their members. This way members of the union benefit from cheap finance and can build common ground amongst members of the union.
Critical Illness Insurance
Critical illness insurance cover provides you with a lump sum of money should a major illness be diagnosed, however this benefit is not payable in the event of a death. Should such a major illness be diagnosed this type of protection can provide capital both for your family and your business. This kind of cover works well in association with Life Insurance. It is able to give you peace of mind, should the unthinkable happen.
