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Oct 11, 2018 · Finance Terms Everyone Should Know. 1. Amortization: Amortization is a method of spreading an intangible asset's cost over the course of its useful life. Intangible assets are non-physical assets that are essential to a company, such as a trademark, patent, copyright, or franchise agreement. 2.
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The issuer borrows the funds for a defined period at a...
- How to Price a Bond
Mar 20, 2023 · See our definitions to help you understand financial and legal terms. First published: 20/03/2023 Last updated: 20/03/2023 This is a new service and we are still building our library of terms - please let us know any comments or suggestions for new definitions in the page feedback section below.
PlainEnglish Campaign:The A to Z of. When money is paid into a fund (such as a pension fund) the allocation rate is the percentage of the money left which can be invested after the charges have been taken off. For example, if the charges were 2% the allocation rate would be 98%.
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This term describes falling behind with regular payments (for example, monthly mortgage or rent payments), or not paying the required minimum amount.
Your assets are the things you own, like vehicles and property. This can include those you don’t yet own outright, which you may have bought on finance.
APR is used to compare the terms of a loan offer with another. It includes all costs associated with a loan, including interest rates, arrangement fees and loan insurance.
This term refers to the process of moving credit card debt from one credit card onto another. This commonly happens when customers switch to a new card, as the new credit card company normally offers a lower rate of interest to transfer the existing debt. Most start at low or even 0% interest but increase after an introductory offer has expired.
The Bank of England sets the UK’s base interest rate. Banks, building societies and other lenders use this as a guide to set their own interest rates for loans and savings. Changes to the base rate can have a sizeable impact on borrowing, so need to be considered before you apply.
Brokers are normally an independent person, rather than a bank or building society. Brokers have access to a wider market of finance products so they can search for the right product for your circumstances.
Capped interest is a mix of variable and fixed rate interest. For a rate that falls below the cap, you will pay a variable rate. If interest rates rise above the cap, you will pay at the capped rate and nothing more.
Compound interest is interest earned on the initial amount of a loan, deposit or savings. Interest is accumulated and added back to the principal sum, giving you interest on top of interest.
The CPI details the prices people are paying for everyday household items. It’s used as an indicator of inflation by keeping track of how much the cost of living rises and falls.
Credit referencing agencies have your credit history on file. This is a record of loans you’ve taken out – such as mortgages, personal loans and mobile phone contracts. It contains details on the amount paid and how well you managed to keep up with payments.
- Paul Stringer
1 day ago · Tags: financial mathematics time value of money. In finance, a year fraction represents a portion of an interest period, expressed as a decimal figure. It is calculated by dividing the number of days of the portion through the number of days in the interest period. Read the comprehensive explanation of the term year fraction
Search our finance and investment glossary for in depth guides and definitions for the most common investing terms. ... Compound interest is the interest added to the balance of a loan or cash ...
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Finance Terms Explanation; Amortisation: Amortization is a financial term that refers to the process of gradually paying off a debt or a loan over a specific period of time through regular installment payments. These payments typically consist of both the principal amount borrowed and the interest charged on the outstanding balance.
