Jargon Buster

Amend
To make minor changes in order to make something more accurate, or to reflect changing circumstances.

Annual Interest Rate (AIR/APR)
This is the amount of interest charged over a 12-month period. Interest is the amount you pay for borrowing money. Interest is calculated and compounded daily. Interest is calculated by multiplying the unpaid balance of the loan at the end of each day by the applicable Annual Interest Rate divided by 365 and such interest amount is then added to the unpaid balance of the loan.
Example:
$130 (amount financed) โ€“ 511% (annual interest rate)
$130 x (511% รท 365) = $1.82 (daily interest)
$130 + $1.82 = $131.82 (balance at the end of day one)

Arrears
This is the legal term for any repayments that are overdue. Loan repayments are in arrears the day after they are due. Being in arrears can affect your ability to get future loans.

Bankruptcy
A legal proceeding involving a person or business that is unable to repay outstanding debt.

Bank Verification
Is a secure online tool you can use to log in to your internet banking to let us view your most recent set of bank transactions/statements โ€“ this is to save you having to send us copies via email or fax.
Rest assured, we cannot make any changes or transactions on your accounts using this online tool.

Broker
A broker is a person who buys and sells things on behalf of others.
Brokering is when a person or a company acts as an intermediary between buyers and sellers.
A broker fee typically applies and will be added to the lenders contract.

Budget
A budget is a financial plan or estimate of income and expenses for a set period of time.
A budget is used to project future income and expenses.
Please use the budgeting tool from sorted.or.nz for assistance in preparing your budget.

Creditor
A company to whom a person owes money.

Credit Reference
This is a statement of information provided by a company that declares a person’s history of credit payments, etc.
Credit agencies in New Zealand are Veda, Dunn & Bradstreet, Centrix, etc. Most offer a free credit report service.

Compound Interest
Where interest is calculated on both the amount borrowed and any previous interest applied.
Our interest is calculated and compounded daily, but may be different for other lenders.

Consolidate
Where a creditor combines all of your existing loan repayments into one and pays these existing loans off for you.
With this service you can eliminate the need to make multiple loan payments and can often eliminate a higher interest debt for lower interest rates.

Consumer
You, the person who applies for a loan.

Creditor
A company to whom a person owes money.

Credit Check / Credit Report
A credit check is used to verify your credit history. This is a document supplied by a credit reporting agency that summarizes your credit history and current financial position. This helps to evaluate your ability to repay the loan.

Credit Reference
This is a statement of information provided by a company that declares a person’s history of credit payments, etc.
Credit agencies in New Zealand are Veda, Dunn & Bradstreet, Centrix, etc. Most offer a free credit report service.

Debt
Debt is money that is owed.

Default โ€“ (On a credit check report)
An amount of money that is currently owed to a company, which is then lodged as a ‘default’ in your credit history or credit score with a reporting agency due to non-payment.

Default Interest 
Interest that is charged on an account that has fallen in to arrears/dishonoured on agreed payments as set out in their contract. Default interest is charged only on the amount that is overdue. Once the overdue amount is paid and the account is brought up to date, default interest is no longer applied.

Direct Credit
A direct credit is where you deposit the amount of money to pay your bill directly into the Company’s bank account.

Direct Debit
A direct debit is a method of payment where the Company organises with you to take the exact amount of money owing from your nominated account on the due date/s.

Discretionary
Means available for use/purchase at the conscious decision of the user. Something purchased for a 'want' and not a 'need'.
Example: Discretionary spending are items like entertainment purchases, birthday gifts, ticketed events or when using services from an online or in store gambling facility, etc.
These items are not necessary to basic living needs and are added extras we can choose (use our discretion) to either purchase or not.

Early Repayment
Is paying off your loan before the originally arranged date. There are no fees or charges from us to pay your loan off early. You will actually pay less, due to the reduced interest from your early repayment. We encourage our clients to make early repayments wherever possible.

Employed / Working
To be employed means to be working full-time for a specified payroll period. We do require this to be with the same employer for at least 3 months. We are unable to help if you are solely on the benefit, receiving funds from superannuation, ACC or a student.

Insolvent
When someone is unable to pay debts owed.

Long-Term Loan
A loan that is lent for a long period of time, usually over a 1-3 years term.

Mid-Term Loan
A loan which is spread out over a 3-12 month term.

Net Surplus
This is the amount of your income that is left over after you have paid all of your outgoing expenses.

Example: $1000.00 (income) - $600.00 (food/rent/petrol) = $400.00 (net surplus).

No Asset Procedure (or NAP)
A NAP is a legal proceeding designed to assist a person who has total debts of $1,000 to $47,000, has no assets and has no financial means to pay back the debts.

Overdue
Loans remaining unpaid past their due date.

Part-Term Loan / 'Fast Track' Loan
A loan which is spread out over a 9-18 month term.

Pay After Tax
This is the amount that you receive from your salary or wage after your tax has been taken out.
This is the amount that shows up in your bank account either weekly, fortnightly or monthly.

Personal Application Limit
This is the amount you are eligible to apply for. This amount is calculated on an affordable percentage of your income. Each application is reviewed on a case-by-case basis and in order for us to keep the loan affordable to you, on occasion we may have to offer you less than this limit, if approved.

Pre-Qualify or Pre-Qualified
Where someone has qualified or met the initial criteria before going through to the application phase.

Repayment Waiver
Where a lender agrees, for a fee, to temporarily (or in some cases, permanently) give up their right to pursue the borrower for what they owe, if the borrower suffers; total disablement, a serious illness, are made redundant or die during the term of a loan agreement.

Settlement Figure
A figure that is calculated to pay a debt in full on a particular date.

Short-Term Loan
Money that is lent for a short amount of time, usually over a 1-3 month term.

Summary Instalment Order (or SIO)
An SIO is a formal agreement between a consumer and their creditors to pay some (if not all) the money owed over a period of time ranging 3 to 5 years. This formal agreement is managed and overseen by a Government Approved Supervisor.

Term
The term is the period over which a loan agreement is enforced. The term runs from the date you take out the loan to the date of your final repayment. (Please refer to Short-term Loan / Mid-term Loan / Long-term Loan)

Wage Deduction
If your account becomes seriously overdue then we may send a request for your employer to process deductions against your wages to pay off your loan but this is a last resort and usually if we cannot contact you to make an agreed alternative arrangement. Wage deductions can be up to 20% of your wages.