Glossary
Lending terms, in plain English.
The words on loan paperwork, defined the way a person would say them. If a term on an offer ever confuses you, it belongs here: tell us and we will add it.
Balloon payment
A lump sum left owing at the end of a loan term, agreed up front, in exchange for lower regular repayments.
Credit score
A number summarising your credit file, used by lenders to price risk, usually on a scale up to 1,000 in NZ.
Debt consolidation
Replacing several debts with one new loan, so there is one repayment, one rate and one finish date.
Default
A credit file listing recording that a payment obligation went seriously overdue, visible to lenders for years.
Establishment fee
A one-off fee a lender charges to set up a loan, usually added to the amount you borrow.
Fixed interest rate
An interest rate locked for the loan term, so the repayment amount never changes.
Guarantor
A person who agrees to repay someone else's loan if the borrower does not.
Hard enquiry
The credit file record made when you apply for credit and a lender assesses the application.
Hire purchase
A way of buying goods where you take them now, pay in instalments, and the seller or lender keeps a security interest until the final payment.
PPSR check
A search of the Personal Property Securities Register showing whether money is still owed against a car or other property.
Quote enquiry
A credit file enquiry type used for rate shopping that is treated differently from a loan application by credit scoring.
Total amount payable
Every repayment on a loan added together, so the amount borrowed plus all interest and fees over the whole term.