Glossary

 

Our glossary is designed to help you understand all the key terms involved with applying for a loan with Uncle Buck. From the application stage all the way to funding and collections, we explain every key phrase you need to know.

APR – This is the ‘Annual Percentage Rate’ and is the most common measure used to compare the cost of financial products. It is shown as a percentage and includes all the costs as if the product was taken out for a year.  If you are looking at a loan over 3 years then looking at the APRs will help you compare the cost, but you cannot try and compare the cost of a 25 year mortgage and a 5 year personal loan by looking at the APR.

Affordability – These are the types of checks carried out during the application and they assess how much you can afford to borrow. By asking for information about your monthly income and expenses, we can get an idea of whether you are eligible for a loan, how much you can afford to borrow and repay without experiencing financial difficulty.

Arrears – This refers to state where money is owed or outstanding. If a customer does not pay their loan on time, their account will fall into arrears.

Continuous Payment Authority – We use this process as a way of collecting recurring payments from a customer. Since a loan will last up to 3 months, we will typically collect the individual’s repayments every month on the same scheduled date. Instead of you making this payment manually, using Continuous Payment Authority allows us to automate this process so we can collect from your account on your chosen date and be alerted if the payment does not go through.

Credit check – We work with leading credit reference agencies to always run a credit check on the applicant prior to funding their loan. By checking their credit report, we are able to get an idea of how well they have paid other types of loans or credit in the past and if they have any other loans outstanding.

Debit Account – This is a card or account that allows people to transfer money to another bank account or make a payment. It is common to receive your salary from work into your debit account. At Uncle Buck, this is the account that we collect your repayment from, so you have to have a debit account to be eligible.

Default – This is when you do not meet a contractual obligation. In our case, it is when a customer fails to make their loan repayment on time and they ‘default’ on their loan.

Direct lender – Uncle Buck is a direct lender meaning that we are the only company that reviews your application, from beginning to end. Therefore, when you apply, you will not be passed onto several other lenders via a broker network or any other middlemen unless you have given your consent to do so.

Drawdown – A drawdown is when the borrower receives money from the lender. In the loan agreements, you might read about a £300 drawdown which refers to the amount you are borrowing from the lender.

Early repayment – Customers have the option to repay their loans early with Uncle Buck. If you want to repay early, you will need to tell us the date on which you want to repay and you may be entitled to a rebate of interest.

Esign – To avoid our customers having to physically sign a loan agreement and send it off in the post, we allow applicants to electronically sign their loan agreement, also known as an ‘Esign.’ This usually involves entering your name, date of birth and a four digit code sent to your mobile phone.

FCA – The Financial Conduct Authority is the regulator of the loans industry in the UK. Uncle Buck is fully authorised by the FCA and authorisation is awarded to those lenders that meet the high level standards required by the regulator.

Fixed interest – Our loans are charged at a fixed interest rate of 0.8% interest per day on the principal outstanding subject to the application of the price cap. Being ‘fixed’ it means that the rate charged will stay the same throughout the entire loan term and will never go up or down, known as ‘variable.’

High Cost Short Term Credit (HCSTC) – an unsecured regulated credit agreement where the APR is equal or exceeds 100% and the credit is substantially repayable within 12 months from the date it is advanced.

Instalment loan – This refers to paying loans in staggered monthly payments, rather than paying your entire loan back in one lump sum. Uncle Buck offers instalment loans that are repaid over 3 months and this gives you greater flexibility and control of your finances.

Loan agreement – This online contract highlights the terms and obligations of your loan. Customers will be required to sign this electronically prior to being funded.

Loan amount – This is the amount you can borrow from your loan. Uncle Buck allows customers to apply to borrow between £100 and £1,000 and the amount you can take out will depend on whether you meet the criteria, credit and affordability checks.

Loan term – This is the length or duration of your loan.

Lump sum – This is a single payment of money. When you receive your loan from Uncle Buck, the entire loan amount will be paid to you in one go or ‘one lump sum.’

Money Advice Service – This is a free and impartial service that offers advice for customers in financial difficulty. For more information, visit https://www.moneyadviceservice.org.uk/en

Pay date – This is the date that the customer selects to make their repayment on. It is usually the day that they get paid from work so that they know they have money in their debit account, ready for collection. The pay date is commonly the last working day of the month but can also be any specific date depending on their pay frequency.

Payday loan – This is a loan lasting typically around 2 to 4 weeks and the money is commonly used to pay for an immediate expense. The idea is that that a payday loan lasts until the customer’s next payday, when they pay off the entire loan amount and interest in full.

Pre-Contract Information– This is known as the Standards European Consumer Credit Information Form (SECCI) and is provided during the application along with an adequate explanations document. This includes the key features of your loan including loan term, amount, costs, repayment terms and more.

Price Cap – Rules imposed on providers of high cost short term credit by the FCA effective January 2015.  These are an initial cost cap of 0.8% per day, fixed default fees capped at £15 and a total cost cap of 100%

Principal – Money that you borrow is known as principal or capital. When you are repaying your loan, you will be paying two parts – the principal (the money you have borrowed) and the interest, which is the fees you are charged for borrowing the money.

Representative APR – This is the rate of APR that is advertised and will be available to at least 51% of successful applicants that apply. Our representative APR is 1,244.1%.

Responsible lending – Uncle Buck is passionate about responsible lending and this means carrying out through checks prior to funding a loan, only granting loans to those that can afford them and offering forbearance if the customer is having financial difficulty.

Treating Customers Fairly – We have a corporate culture to ensure that customers feel that they are being treated fairly in every aspect of the loan process.

Underwriting – This is the part of the application stage and refers to the checks carried out prior to approving your loan. Where required, our team of underwriters will review your application, credit checks and affordability and decide whether or not you are eligible.