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

Loan – Glossary - important-words-and-phrases

Here at Dot Dot Loans, we try to make our loans as simple as possible. We've put together this glossary of loan terminology, so that you can understand what you are agreeing to in simple terms.

Of course, if you still have questions, please don't hesitate to get in touch. One of our friendly customer service team will be happy to answer your questions.

Term What it means

Adequate Explanations

This document provides you with important information about your loan so you can assess whether it meets your needs and financial situation.


An interest rate is the price you pay for borrowing money. The interest rate will be lower than the the Annual Percentage Rate (APR) if there are other fees and charges applicable to a loan.

Remember, Dot Dot Loans does not apply any additional fees or charges to its loans.


If your account falls into arrears it means you've missed, or are late making, a repayment. This could affect your credit score if your lender reports the missed payment to a credit reference agency. Make sure you speak to your lender as soon as possible if you think you won't be able to make a repayment on time.


A broker does not lend money, but refers someone applying for credit (such as a loan) to a lender who may be able to provide them with the type of credit they are looking for.

Continuous Payment Authority (CPA)

A CPA is a way of collecting regular repayments from your bank account using your debit card details and is different to a Direct Debit. If your Direct Debit fails a lender may attempt payment by CPA (if it's covered in their Terms and Conditions). You have the right to cancel a CPA at any time by contacting the lender or your bank.

Credit Reference Agencies (CRAs)

CRAs are organisations that collect information about your credit history and calculate a credit score based on this information. Lenders request this information when assessing your application for a loan. The CRAs in the UK are Experian, Equifax and TransUnion.

Credit check

This is a search carried out by lenders using information provided by the CRAs when you apply for credit. It allows the company to look at your credit file and asses your financial history.

Credit report

Your credit file contains all the information held about you by by credit reference agencies (CRA). Keep in mind that each of the three CRAs may hold slightly different information about you. It includes your personal details along with a record of your credit history. You can obtain a copy of your credit file (often known as a “credit report”) by contacting the CRAs.

Credit score

Your credit score is a three-digit number given to you by the CRAs that indicates how reliable you are at borrowing and repaying money. Each CRA calculates your credit score in a slightly different way, and your credit score may vary between them as a result. Generally speaking, though every lender has its own set of criteria, the higher your credit score the more likely you are to be accepted for credit.

You can check your credit score by requesting a copy of your credit report from the CRAs.

Default notice

A default notice (sometimes referred to as a Notice of Default) is usually issued by a lender after several payments have been missed. If the amount stated on the default notice is not cleared within the set time, then the loan agreement will be terminated. and you will be expected to repay everything you owe immediately. A default will be registered at the CRAs for 6 years and this could have a negative effect on your credit score and your ability to borrow in the future.

Direct lender

A direct lender funds your loan and are responsible for collecting the repayments.

Early Settlement

Early settlement means repaying what you owe earlier than the date agreed when you took out your loan. You may receive an interest rebate if you repay some or all of what you owe ahead of schedule.

Fixed interest rate

A fixed interest rate is an interest rate that does not change for the duration of your loan agreement .

Instalment loan

With an instalment loan, you repay what you owe over a number of instalments rather than one lump sum.

Interest rate

An interest rate is the amount you are charged for borrowing money, shown as a percentage of the total amount of the loan.

Loan agreement

This is the contract between you and the lender. By signing the loan agreement, you are agreeing to its terms and conditions.

Open Banking

Open Banking is a secure way to give financial service providers access to your financial information. For example, instead of having to send in documents, such as bank statements, Open Banking allows lenders to view this information electronically, with your permission.

Payment Holiday

A pause or a reduction in loan repayments that is agreed in advance with your lender. If you take a break from making monthly repayments, the cost of the missed payments will then usually be spread across the remaining term. If you are a Dot Dot Loan customer and have any queries or are experiencing any difficulties, please get in touch. For more information, you can also visit our 'Money Worries' page.

Pre-contract credit information

The information in this document is intended to allow you to compare the features of a credit product, such as a loan, with other alternatives before committing to signing the agreement.

Representative APR

This is the interest rate that lenders advertise to enable potential borrowers to compare the cost of credit. The interest rate that applies to your loan may be higher or lower than this advertised rate.


Once you have taken out a loan, you must repay what is owed, and this is often spread over a number of instalments. Loan repayments cover the amount borrowed, plus any interest and charges that may apply.

Secured loan

A secured loan is a type of borrowing that allows the lender to take ownership of a borrower's asset, such as a home or a car, in the event that they fail to repay what is owed.

Loan term

This is the length of time the lender allows for a borrower to repay their loan.

Unsecured loan

Unlike a secured loan, an unsecured loan (can link the URL) does not involve a lender taking ownership of a borrower's asset in the event they fail to repay what is owed.