Financial Terms Glossary

At ACF Car Finance we understand how confusing it can be to understand the ‘jargon' used across the finance market. That's why we've put together this glossary which is designed to explain some of the key financial terms.

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z

Annual Percentage Rate (APR)

The APR is defined in regulations that were made under the Consumer Credit Act 1974 and is a measurement of the total charge for credit that will be made by the lender over the whole term of the loan. The APR also takes into account any other charges which the borrower has to pay.


The amount you have not paid in respect of scheduled repayments of a debt you owe i.e. sums that remain outstanding past their due date of payment. This is different from the balance owing under the debt.

Bill Of Sale

An assignment or transfer of title in goods to another by way of security for the payment of money. An example is where a finance company lends you money for the purchase of goods via a Credit Sale Agreement, and as security for the loan retains title in the goods until the Credit Sale Agreement is repaid in full. The actual goods remain with you unless you fall behind with payments, when the finance company can seize the goods from you and sell them.


A person owing money that has been lent to them by a bank or other lender. Another name for a borrower is a debtor.

Car Finance Calculator

A car finance calculator usually works by asking the customer to input figures including a loan amount, a rate of interest and the repayment term. The calculator then works out a total repayment and a monthly repayment figure.


Credit means buying goods or services now (on credit) and paying for them later.

Credit Limit

The maximum amount that a bank or other lender is prepared to let you borrow.

Credit Rating

A person's credit rating is based on their credit history, maintained by credit reference agencies, using information supplied to them by lenders. A person who has a bad credit history is likely to have a poor credit rating. However there are other factors which influence an individual's credit worthiness and
ACF Car Finance works with responsible lenders who asses a customer's overall affordability before approving them for finance.

Credit Reference Agencies (CRAs)

Companies that hold information regarding individuals and their past conduct in relation to credit that is of interest to lenders. This information can be used in order to help the creditor make a decision on whether or not to lend the consumer money.

Credit Sale Agreement

An agreement to purchase goods on finance. You are the legal owner of the goods as soon as the contract is made. The finance company cannot repossess the goods if you fall behind with payments but can take court action to recover the money owed if you are in arrears.


Someone who is owed money - the lender.


A person owing money that has been lent to them by a bank or other lender. Another name for a debtor is a borrower.


Most commonly, a debit is a withdrawal from a bank account.

Direct Debit

A payment that is made directly from a bank account and is usually an electronic payment. A Direct Debit is usually a transaction that has been requested by the account owner under a Direct Debit instruction to his bank to take place at a specified time and on a specified date in relation to a specified payment.


When you fail to meet the terms or conditions of a Credit Agreement this is known as being in default. An example of this would be not making your scheduled repayments on a loan or not making them on time.


An amount of money put into a bank account or money that is left with someone or a company to secure the purchase of an item.

Finance Company

A company which leads money to customers via a Credit Agreement..

Hire Purchase

An agreement to purchase goods on finance. You will not be the legal owner of the goods until you've paid back all of the money you owe and the option to purchase fee. The finance company will own the goods until the final repayment and the option to purchase fee is made. The finance company can take the goods back if you don't keep up your repayments but if you've paid more than a third it would need a court order to do so.


The amount a lender charges a borrower for the use of the lender's money. For example, if money is borrowed from a lender in the form of a loan, the lender will charge interest for the use of that money. Interest can be charged daily, weekly, monthly or annually.


A person who borrows money jointly with you under a joint debt. Each co-borrower is both jointly and individually responsible for the repayment of the loan. This means that both co-borrowers are responsible for the debt but if one co-borrower refuses to pay the other co-borrower can be asked to repay full amount of the loan.


Money lent to a customer via a Credit Agreement for a period of time (called the term). By the end of the term, the money must be repaid, often with interest added.


An amount of money that has not been paid by the due date and is still owed.


A lender may be able to claim or take possession of any property, assets or investments that have been provided as security for the repayment of a loan in circumstances where the borrower cannot repay the loan.


An asset offered by a borrower to a lender as security for the repayment of a loan. The security is aimed at ensuring that the lender is able to recover the full amount of the loan (by selling the asset) if the borrower can't repay the loan.

Standing Order

An instruction to a Bank to pay a fixed amount to a person or organisation at regular intervals.


The length of time in which a loan must be repaid.

Terms And Conditions

Terms and conditions set out the specific obligations of each party in respect of a transaction or product. They outline how a product or service can be used and should be read and understood before the product or service is used by the customer.

How to Apply

  • Aged 21 or over
  • Hold a valid UK Driving Licence
  • Earning £800 or over per month
  • Resident in England or Wales
    (3 years' address history)
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