Car and personal loans glossary for Australians

A-E

4WD: Four-wheel drive for better off-road traction.

AWD: All-wheel drive powers all wheels continuously.

Account balance: The amount of money you have in your account.

Annual fee: Yearly charge by the lender for loan administration.

Appraisal: Estimate of a property’s value.

Asset: Anything valuable owned by an individual.

Bad debt: Uncollectible debt, worthless to the creditor.

Bankrupt: Unable to pay debts, with liabilities exceeding assets.

Borrowing power: Amount a lender may lend you based on your financial situation.

Business loan: Loan for business use.

Budget: Plan of income and expenses over a period.

C-E

Cash advance: Instant loan from a lender.

Collateral: Property pledged as security for a debt.

Comparison rate: Interest rate plus fees and charges for a loan.

Construction loan: Loan for construction costs.

Contract: Binding agreement between parties.

Conveyancing: Legal process of property ownership transfer.

Credit: Agreement where a borrower receives value in exchange for a promise to repay later.

Credit enquiry: Record on your credit report of credit applications.

Credit report: Record of credit history used by lenders.

Credit score: Number indicating your creditworthiness.

CTP: Compulsory Third Party insurance for road injuries.

F-L

Fixed interest rate: Interest rate fixed for the loan term.

Interest rate: Percentage of the loan amount charged as interest.

Loan term: Time to repay the loan.

Lender: Person or company that provides funds.

Liability: Debts or financial obligations.

Liquidate: Ending a company due to inability to pay debts.

M-P

Mortgage: Legal document pledging property as loan security.

Ongoing fees: Regular fees during the loan term.

PPSR: Register of security interests on personal property.

Pre-approval: Initial agreement to lend money, not final.

Redraw: Accessing extra repayments made on a loan.

Refinance: Replacing an existing loan with a new one.

Renovation loan: Loan for property improvements.

S-Z

Secured loan: Loan secured by an asset, like a car.

Stamp Duty: State fee for vehicle registration or transfer.

Unsecured loan: Loan without asset security.

Upfront fee: Initial fee for loan processing.

Variable rate loan: Loan with an interest rate that changes with the market.

VIN: Vehicle Identification Number, a unique vehicle identifier.