Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk

Listed below are a number of financial terms that you may have come across when looking for a loan. We know some of this common jargon can be a bit baffling, so we’ve put together this handy guide to help make things a little clearer.


This is a legal requirement. It stands for Annual Percentage Rate of charge which is a way of expressing the total charge for credit as a percentage of the total amount borrowed. It’s intended to help you compare the cost for credit of like for like loans. Another way to compare your borrowing options is to look at the total amount you’ll repay overall.


This term is used to describe any money outstanding on your account as a result of late or missed repayments or reduced repayments compared to those agreed at the start.


A budget is a plan that you can put together to help you balance how much money you have coming in each month and how much you are paying out as it will show you what money you are left with.  It can help you understand how much spare cash you have available to spend or whether you are spending too much. You can budget on an individual basis to keep track of your personal finances or as a household.

Right of Withdrawal

This refers to your right to withdraw from a credit agreement, which means you can change your mind and cancel the loan agreement. You typically have 14 days to change your mind and will be expected to repay the money you borrowed plus interest for each day you had the money in your account. It’s always worth checking the paperwork though, as this can vary from lender to lender.

Continuous Payment Authority

A Continuous Payment Authority (CPA) is a way to make regular, automatic loan repayments from your credit or debit card. You give your lender permission to collect your repayments by CPA once and this then applies for all repayments of your loan. You have permission to cancel this if you need to.


This is when you agree on a contract basis to receive something of value and pay it back in the future. In the world of loans, you are agreeing to receive an amount of money and repay that money plus interest by a certain date, either in one lump sum or a number of instalments.

Credit bureau

A credit bureau, also known as a credit reference agency, is a company that collects information from various sources and compiles credit information on individual. Examples of a credit bureau include Experian and Call Credit.

Credit check

credit check is typically completed by a company every time you apply for credit, whether that is a credit card, loan, mortgage or even a mobile phone contract.

Companies use the information you provide to look up your credit record, which shows information about your past financial behaviour such as your payment history on other credit and how much credit you currently have. They use this to help them make an informed decision about whether they should lend to you. It’s worth bearing in mind that your record can vary depending on the credit bureau the lender chooses to use to compete their check.

Credit score

Your credit score is based on the information from your credit record expressed as a number to represent your creditworthiness. Just like your credit record, your score can vary depending on the credit bureau used. 


A default is a failure to fulfil an obligation, which in the context of a loan means you have failed to pay back one or all of your scheduled repayments on time as agreed in your contract. If you have missed a number of repayments the lender will issue you with a default notice and report it to the credit bureau, where it will be added to your credit record. This could affect your ability to borrow from us or other lenders in the future.

Early settlement

In simple terms an early settlement is exactly what it says on the tin, it means you settle (or repay) your loan early. There are two main types of early settlement;

  • Full early settlement: where you choose to repay your balance in full ahead of the agreed schedule
  • Partial early settlement: where you choose to repay part of your balance ahead of the agreed schedule

Whichever option you choose, you may save money as the lender will look at the interest charged and to account for the fact that you had the money for less time, a rebate may be due.  Check your paperwork as although you have a legal right to settle early (in full or in part) each lender will have their own early settlement policies.

When you tell us that you want to settle your Satsuma Loan early, we will give you a settlement quote so you know how much you need to pay in total.  This will be valid for 28 days. The amount you need to pay to settle your account will include interest calculated to cover this 28 day period in which the quote is valid. This amount is payable even where you settle the loan immediately. This is in accordance with the provisions of the Consumer Credit (Early Settlement) Regulations 2004.

Financial jargon buster


Interest is the charge for borrowing; it applies to all types of borrowing including loans, credit cards and even mobile phone contracts. Two common ways of applying interest you may have come across when looking for a loan include;

  • Daily interest: where interest is calculated on a daily basis (throughout the loan period) based on the outstanding balance each day
  • Fixed interest: where interest is calculated upfront and the full amount is added to your loan amount at the outset. This is how Satsuma Loans calculates their interest so you always know the full cost of your loan upfront.


The amount you and your lender have agreed you will pay back, whether that’s in one lump sum or at regular intervals throughout your loan term. For Satsuma Loans this is a fixed monthly or weekly amount that’s affordable for you.

Total amount payable

This is the total amount you pay back to a lender. It combines the money borrowed and any interest on top. At Satsuma we show you this up front and don’t add anything later down the line if you run into difficulties.

Total charge for credit

This is the amount you will be charged in total for your borrowing. With Satsuma Loans this will only ever be made up of interest, but other lenders may have additional fees or charges to consider.

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Representative example: £480 loan repayable over 9 months. 9 monthly repayments of £106.56. Rate of interest 133.1% p.a. fixed. Representative 535% APR. Total amount payable is £959.04