Loans Jargon Buster / Glossary

At Save My Bacon we try to keep our short-term loan service as quick, simple and as straight forward as possible. However the financial world is full of jargon, so to help you out a bit, Save My Bacon has come to the rescue with our Loans Jargon Buster and Glossary.

Agreement

An Agreement is an arrangement or contract between at least two parties or individuals which regulates the terms of a loan. Signing a Loan Agreement holds the borrower responsible for keeping to the agreed arrangements for repaying the loan. Therefore, you should always consider the cost and the terms carefully before completing any offer of credit.

AIR

AIR stands for annual interest rate. This figure allows you to compare the cost of different loan products.

Arrangement fee

This is a fee the lender charges in order to cover administration costs.

Arrears

When a borrower’s loan repayments are overdue, he or she is classed as being in “arrears”. When this happens the borrower typically has trouble gaining further credit as the state of “arrears” affects his or her credit rating. Employees are also typically paid in arrears. This is because payday is at the end of a working week or month, during which an employee’s salary was being earned.

Bank

Banks are formal institutions where people, charities and businesses can invest or borrow money. Banks also offer several other services such as foreign currency exchange and insurance.

Bank loan

Bank loans can be for personal or business use. Personal bank loans are typically for sums over $1,000. The Bank would normally require the borrower to repay the money over a year or more and an application for a bank loan would normally require a meeting with your personal bank manager, plus a full credit check. Not all people are approved for a bank loan even if they have been customers with the bank for a long time.

Bridging loan / Bridging finance

This is a temporary loan advanced to help you buy a new property before you sell your existing one.

Budget

Creating and maintaining a budget is a great way to help you stay in control of your finances! A budget of your personal financial situation shows your income against your outgoings. By making a budget you can help ready yourself for a shortfall of cash, or work out how much you should have left over to spend or save. See our Free Budget Service which links to a handy Budgeting Tool.

Cash advance

This is another term used to describe a cash loan (See cash loan below).

Cash loan

A cash loan is money provided against a prearranged line of credit such as a loan agreement. The phrase might be used to describe a small loan made over a short period of time, compared to traditional bank loans which are usually taken for a year or more and can even be repaid over several decades in the case of mortgages. Save My Bacon provides cash loans.

Charges

This is the money paid to a financial institution for the services they provided you with. Financial Institutions can also apply penalty charges if their services are misused or their terms of use are broken. Penalties are imposed for things such as late payment fees, bounced cheques and unauthorised overdrafts.

Credit balance

This is the amount of money in your bank account when you are in the black (a “positive” balance).

Credit card

A credit card allows you to borrow money up to your set credit limit in order to pay for goods and services from many companies around the world. Traditionally credit cards charge higher rates of interest than other forms of unsecured loans from banks.

Credit check

This is a check lenders can make via a credit reference agency (See below) as to your credit history.

Credit limit

A person’s credit limit is the maximum amount of money that he or she can borrow. Your credit limit is set by the particular lender who is making an offer of credit to you and at Save My Bacon you can borrow up to $1000 credit limit. We work out how much you can borrow using our affordability calculations. We take into account repayment amounts after fees have been added and the interest has been accumulated for the term of the loan compared to your normal income level.

Credit rating

A credit rating assesses how “credit worthy” you are. Credit ratings are also called credit scores and they help lenders decide whether they can lend money to you. Credit ratings are “scored” from a series of questions a lender asks about your financial history, current assets and liabilities. A credit rating is supposed to give the lender an indication of the probability of your being able to pay back a loan. A bad credit rating would indicate a high risk of your defaulting on a loan which would typically lead to the lender charging higher interest rates on the loan, or refusing the loan application altogether.

Credit reference agency

A credit reference agency (called a credit bureau in the United States) is an organisation that collects and holds information about the credit history of individuals. It provides this information, typically in the form of a credit rating (see above) to lenders to help them assess how credit worthy and likely someone is to pay back a loan. Based on this information, lenders may refuse loan applications or charge higher interest rates. Examples of credit reference agencies in New Zealand are Veda Advantage and Dun and Bradstreet.

Credit report

This is a summary of your credit history. Organisations such as your bank and credit reference agencies collect the information required to produce a credit report. The information often contains your past borrowing behaviour, any previous loan applications, any court judgments, and whether you regularly default on mortgage and other bill payments. Credit reports are purchased by the lender to help assess your “credit worthiness”. You can apply for a copy of your own credit report from a credit reference agency.

Debt

This is money you owe to an individual or an organisation. For more advice about managing debt see our Free Budget Service or you can seek help from the Citizens Advice Bureau.

Direct Debit

A Direct Debit is an instruction from a customer to their bank or building society to make regular payments directly from their account to someone else's. For example, you can pay bills this way automatically.

Early repayment

This is when you repay the money you borrowed before the arranged due date. Early repayment is a statutory right in relation to all consumer credit contracts in New Zealand, although other loan structures sometimes charge fees for early repayment reflecting the administrative costs of full prepayment. Save My Bacon doesn’t charge you for paying back your loan early and in fact encourage it where possible!

Fast cash

This is another term used to describe a fast loan (See fast loan below).

Fast loan

This is a short-term loan (See short-term loan below) that you receive into your bank account quickly. How quickly depends on the lender. Because employ a Trust Rating Score at SMB Online Kitty it is possible to receive the loan on the day you apply (See same day loan below).

Fixed interest rate

This is where the interest rate stays the same rate for a specified period of time.

Gross

This is the whole amount of a sum of cash - before any deductions are made from it such as tax or fees.

Gross interest rate

This is the interest earned before any income tax is deducted.

Interest

You pay interest for borrowing money and you may also receive interest for depositing savings. Interest is expressed as a percentage rate over a period of time. See AIR for an example of a commonly used type.

Interest rate

The interest rate is the rate that is paid on top of the money borrowed or saved, expressed as a percentage of the amount of cash that you borrow or deposit.

Loan

A loan is the term used for money that is borrowed on the condition that it is paid back under the terms agreed. There are a number of different types of loans, including a short term cash advance or pay day loan.

Loan period

A loan period is the time for which money is borrowed, or the period over which payments are made until both the loan and the interest on the loan are fully settled. A loan period is also called a repayment period. Save My Bacon loans are short-term and the selected loan period can be between 1 and 42 days.

Net

The amount of cash after all deductions, such as tax or fees, have been made from the gross amount. For example, your net pay is the amount of money you receive after all tax and other deductions have been removed.

Net interest rate

This is the rate of interest payable after the deduction of NZ income tax at the rate specified by law. The rate of tax may vary depending on the circumstances, such as the income of an individual.

Online payday advance

This is another term used to describe an online short-term loan (See online short-term loan below).

Online payday loans

This is another term used to describe an online short-term loan (See online short -term loan below).

Online short term loans

This is what Save My Bacon currently offers: short-term loans which are applied for over the internet.

Paycheck advance

This is another term used to describe a payday or short-term loan (See payday loan below).

Payday advance

This is another term used to describe a payday or short-term loan (See payday loan below).

Payday loan

A payday loan is a small short-term loan that’s intended to help cover a borrower's expenses until his or her next payday. Payday loans have a reputation as an option for those people who need a little cash quickly and can’t get credit elsewhere.

Payday advance online

This is another term used to describe an online payday loan (See online payday loan above).

Payday loans online

This is another term used to describe an online payday loan (See online payday loan above).

Penalty charges

Penalty charges are the fees charged for breaking the terms of your banking or borrowing agreement with a financial institution or lender. Penalty charges are imposed for things such as late payment fees, bounced cheques and unauthorised overdrafts.

Promise date

This is the date the borrower says that he or she will certainly repay the loan by.

Quick loan

This is another term used to describe a fast loan (See fast loan above).

Rate

The rate refers to the level of interest on the loan charged by the lender. This is called the “rate of interest or interest rate”.

Responsible lending

Save My Bacon is committed to the practice of responsible lending. A responsible lender does not want to keep you in debt, but wants you to repay your loan quickly. At Save My Bacon we aim to only lend to people who we believe can afford to repay us as agreed.

Same day loans

This is a short-term loan (See short-term loan below) that you receive into your bank account on the day you applied for the loan. Save My Bacon offers same day loans. Certain conditions apply. Please see our Same Day Payment Guarantee and our FAQs sections for details.

Secured loan

A secured loan is a loan where the financial institution or lender has the right to reclaim the loan value from one of your assets, such as your house or car, should you fail to keep up payments. Mortgages are the most common type of secured loans.

Short-term loan

Short-term loans are defined differently by different lenders. For example, a bank might consider a year to be a short term for a loan when compared to a mortgage loan. Payday loans are typically considered short-term loans. Save My Bacon loans are short term and the selected loan period can be between 1 and 31 days.  Our short-term loans are intended to help cover a borrower's expenses until his or her next payday.

Same day payment guarantee

Save My Bacon offers a guarantee whereby it promises to process its payment request to your Bank within 60 minutes of loan approval. Please see our Same Day Payment Guarantee section for further details and a list of participating banks.

Term

The time period over which the loan is to be repaid.

Total amount payable

This refers to the total cost of repaying a loan.

Unsecured loan

An unsecured loan is a loan where the lender does not have immediate rights to reclaim the value of your loan from an asset, such as your house, should you fail to meet your payment obligations towards the loan as agreed. However, an unsecured loan is still a serious legal commitment and there will be significant penalties if you fail to repay it. 

Verification code

Save My Bacon sends a verification code to your mobile during the application process. Please see our Trouble Shooting and our FAQs sections for further details.

Variable interest rate

This is where the interest rate that you pay on your loan or mortgage can increase and decrease.

Wage deduction authority

A Wage Deduction Authority assigns your wages, salary, commissions and holiday pay to be paid to the lender in the event that you fail to repay your loan as agreed on the due date.

The type of credit is not intended to meet your long-term financial needs or to be used for dealing with existing ongoing financial problems.
This loan should only be used to meet short-term cash needs and not be used as a continual source of credit.
If you are concerned that you are falling into a bad debt situation, then please do not apply for a Save My Bacon loan as our loan will only worsen your situation.