Loans - Jargon Buster - RBS

The purpose of an APR is to show the total cost of borrowing over the period of an average year so, as well as interest, the figure includes upfront fees and charges. This makes it easier to compare deals like for like.

It is issued by a County Court for failing to repay a loan or outstanding debt, and will have a negative impact on your credit rating and may affect your ability to get a loan or mortgage.

This is the 'score' given to you depending on your personal credit history. So if you've always kept up repayments on any form of credit you've had, you'll have a good credit rating, whereas if you've failed to meet payments or, say, have a CCJ against your name, your credit rating is likely to be poor.

A one off charge applied by the lender if you decide to pay off your loan early, before the term set when applying for the loan

A set rate of interest that cannot go up or down during the period of the loan.

When you borrow money, the lender will make a charge – known as interest. For example, if you borrow £100 at an interest rate of 10% for one year, you would have to repay £110 at the end of the year.

The estimated cost of a loan, usually showing monthly repayments and the total amount that will need to be repaid.

The actual cost of your loan could be different from the quote - we work out the actual cost based on your specific circumstances. We’ll give you the actual cost during your application.

This includes the capital amount borrowed plus the interest charged.