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Jargon Buster

When you’re buying goods or services and you have the option to spread the cost using finance, you might be faced with words and phrases that seem complicated or you don’t understand.


If you’re shopping online, we ask our retail partners to display a finance information page on their website, which aims to provide you all the information you need to know and simplify the terms you’ll see at checkout.

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Keeping it simple

No matter if you take out finance online, in store or over the phone, finance terms and conditions can be complex, so we’ve translated some of the jargon you might face when taking out finance into simple language to help you understand.

Check below to see what some of the most used terms in finance really mean.

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Commonly used finance terms

APR (Annual Percentage Rate)

The APR is a measure of the cost of borrowing money, expressed as a percentage. It includes both the interest rate and any additional fees or charges.

Representative APR

Lenders advertise a representative APR to give an indication of the interest rate that the majority of their customers are offered. 
But, it is important to note that the actual APR you receive may be different based on your creditworthiness and other factors.

Representative example

A representative example sets out the typical costs of a loan or credit product. It includes important details such as the loan amount, interest rate, fees, repayment period, and total repayment amount.

Deferred payment

Deferred payment means you won’t start making payments until a set period has passed.
You may be able to make partial payments during this period and the lender will let you know how they will apply interest at the end of the period.

Interest rate

The interest rate is the percentage charged by a lender on top of the amount you borrow. The higher the rate, the more you will pay for the loan.

Purchase rate

The purchase rate is the interest rate charged on purchases made using a credit card or digital credit account. 

0% interest

This means that you won’t pay any interest on your loan if you make all repayments on time.
Please note, if you miss any payments on your finance then you may be charged late payment fees. Some lenders may also charge interest on late payments.

Interest free

This means that you won’t pay any interest on your loan if you make all repayments on time.
Please note, if you miss any payments on your finance then you may be charged late payment fees. If you see “interest free” then there should be no late payment interest, but you should check the terms of your finance agreement to be sure.


You’ll see this next to the “purchase rate” or “interest rate” – it means that the company can change the rate of interest charged on your finance. (They are required to tell you if they do this). 
This is usually the case with credit cards and digital credit accounts.


You’ll see this next to the “interest rate” – it means that the rate of interest won’t change during the full term of your loan.

Subject to status

When you see ‘Subject to status’, it means that the lender will need to check if you qualify and are eligible for the finance. This will involve a credit check and risk assessment by the lender. 
It serves as a reminder that not everyone may qualify for the finance offer advertised.


Affordability is your ability to comfortably meet loan repayments on time, without affecting your other financial commitments like your regular bills and food shopping.
It takes into account income, expenses, and other financial factors.


Creditworthiness is a lender’s view of your affordability, combined with their assessment of the risk that you will not repay your loan, including whether you meet their eligibility criteria.

Credit File

Everyone has a credit file. If you’ve ever had a loan, credit card, mortgage or other credit product, it will most likely be listed on your credit file, along with a record of your repayments and missed payments.
Credit files are stored and shared by the Credit Reference Agencies.
Lenders use information on your credit file to decide whether they will lend to you. 

Credit Reference Agencies (CRAs)

There are 3 main CRAs – Experian, Equifax and TransUnion. They store your credit information and present it to lenders as your credit file.
You can access your credit file with the CRAs directly. Please note, some lenders don’t report credit accounts to all three CRAs, so you might find more information on your credit file with one CRA than with another.


A CCJ is a legal decision issued by a County Court in the UK when a person fails to repay a debt. A CCJ will appear on your credit file and affect your credit score.

Consumer Credit Act

This law sets out the requirements that apply to companies offering consumer finance.

Financial Conduct Authority (FCA)

This is the regulatory body for consumer credit. They set the rules and guidance for companies in the industry to follow and take action against companies that don’t comply with them.

Advance payment

This is your deposit payment.

Introducer Appointed Representative

An Introducer Appointed Representative (IAR) is a company that is appointed by an FCA authorised company to introduce customers to them to provide regulated financial services.
An IAR isn’t directly regulated by the FCA, but the Principal firm, which has appointed the other company as an IAR, will be FCA regulated and is responsible for the activity of the IAR company.