APR:
The APR (annual percentage rate) is determined by the cost of each credit agreement, taking into account all the charges made under the agreement. It enables a borrower to compare the cost of each deal and work out which is the best value for his condition. So, he can evaluate hire purchase agreements with each other. On the other hand, one should not attempt to compare a mortgage with a credit card deal. Each one offers different terms.

Bad credit:
Bad credit is a condition wherein a borrower’s credit history is affected by CCJs, IVAs, defaults, late payment, bankruptcy, etc.

Bank of England
The Bank of England is the central bank of the United Kingdom. The rate of interest to attain the treasury’s inflation target is set by it. The Bank of England has independent powers to set interest rates.

Bankruptcy:
Bankruptcy is a legally declared inability or impairment of ability of an individual or organisation to pay their creditors. Bankruptcy is a legal action wherein an individual who is unable to meet financial commitments is declared bankrupt by a decree of the court.

CCJs:
County Court Judgements are termed CCJs in short. It occurs when a borrower is not able to repay his debts. After a court hearing, the court may issue an order saying a borrower must repay the debt within a stipulated time.

Credit rating:
Credit rating is a method to evaluate a borrower’s history on repayment of past loans. Credit reference agencies bring together a credit report that may include your payment history, a list of current and past credit accounts and their balances, employment and personal information, and a history of past credit problems.

Credit reference agencies:
Credit reference agencies keep accounts of a borrower’s credit history that can be passed to the financial institutions where he applies for a loan. The information such as details of credit agreements, payment records, court judgements, bankruptcy, etc., is made available to lenders who use it in their credit scoring or underwriting systems.

Fixed rate:
The interest rate on a secured loan, which is fixed at a certain level, is known as a fixed rate of interest. Therefore, it will remain the same for a specific period or the term of repayment - you decide which.

IVAs
An Individual Voluntary Arrangements (IVAs) is a formal agreement between the debtor and the creditors. An IVAs’ proposal sets out how the debtor is going to repay the creditors, usually over a period of five years. An IVA is a legally binding arrangement supervised by a Licensed Insolvency Practitioner, the purpose of which is to enable an individual, sole trader or Partner ("the Debtor") to reach a compromise with his creditors and avoid the consequences of bankruptcy or other penalty.

Secured loan:
A secured loan implies that a borrower may use his or her property as collateral against the loan to decrease the risk assumed by the lender, thus ensuring a reduced interest rate.