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Jargon Buster

Nemo's Jargon Buster will help you unravel the financial jargon used in secured loans

Advance copy credit agreement

Under the Consumer Credit Act 1974, you are entitled to a consideration period of up to 16 days. You will receive an application pack at the beginning of this period containing an Advance copy of the credit agreement – this document is a copy of the credit agreement but the facility to sign has been removed. The actual credit agreement will arrive for you to sign after 8 days. If you have any questions about your advance copy of the credit agreement, please contact your loan officer.

AIP

An AIP or ‘Acceptance in Principle’ refers to an offer Nemo makes to you subject to us processing and underwriting your loan application.

Application Pack

After you have spoken to one of Nemo’s Loan officers you will be sent an application pack containing the paperwork you will need to complete your loan.

APR

When you are looking for financial products including loans or credit cards, you will often see an APR quoted. Annual Percentage Rate or APR is a yearly rate of charge that includes interest, fees and other costs involved in obtaining loans and other financial solutions. Rates are calculated in a uniform way taking into account the average compound interest rate over the length of your loan. APRs enable borrowers to accurately compare the total cost of borrowing between products and providers.

Arrears

Arrears are missed payments. When you take out a loan with Nemo, you will be fully aware of the amount and date that you should make your repayments to us each month. Monthly repayments should be paid by Direct Debit from your own bank account. It is important that you keep your loan payments up to date because your Nemo loan is secured against your home. If you are having trouble making some or all of your repayment then please contact us as soon as possible. It’s important to be honest with us, the more honest you are then the easier it will be for our specially trained Arrears Management Officers to help you. There are lots of ways in which we can try and help you to manage your Nemo Loan some of which are reduced repayment plans, changing the date of your payment and other solutions to fit your individual circumstances.

Contact us

Brokers

A broker is an individual or company who will, usually for a brokering fee, search for a product that is most suitable for you, in this case a secured loan. They will then liaise with the provider of that product on your behalf to apply for and obtain your loan.

BSQ

A BSQ or Building Society Questionnaire is a document provided by your mortgage company to Nemo, verifying the outstanding balance and monthly payments. Your loan officer at Nemo will organise a BSQ if one is required and Nemo will cover the cost your mortgage company charges for providing the information.

Capital Repayments and Overpayments

A capital repayment reduces your capital balance on which interest is charged. This is a lump sum that you pay in addition to your normal monthly payments. An overpayment is where you increase the amount you pay us every month, above the monthly payment amount due. Overpayments will only reduce your capital balance (in other words, be treated as capital repayments) if you ask us to treat them as such, or once the total you have made exceeds in aggregate the lower of (i) £500 and (ii) three times your monthly payment amount. If they are not treated in this way, they will be applied to your account but will not reduce your total interest if you settle early. After a capital repayment (or overpayments, which are treated as such) your monthly payments will be recalculated to keep the same term.

Cash out

Cash out refers to any funds received from a Nemo loan that are paid as a personal cheque to the borrower/s. For example if you borrowed £40,000 and consolidated £35,000 of other credit the ‘cash out’ would total £5,000.

CCA

The Consumer Credit Act 1974 (CCA) affords the borrower certain protections when taking a secured loan such as providing all customers a consideration period.

CCJ

A CCJ is a County Court Judgment. This refers to a court issued order saying a debt must be paid.

Consent

Most mortgage companies place a restriction on the Land Registry stipulating that any subsequent lender must first obtain their permission before a loan can be secured. If your mortgage company has placed such a restriction then Nemo will require their consent before we can pay out your loan. Your Nemo Loan Officer will organise this for you and Nemo will cover the cost of obtaining this consent if required.

Consideration period

Under the Consumer Credit Act 1974, Nemo is required to provide all customers with a consideration period of up to 16 days before their Credit Agreement can be put in place. This is to give you a chance to consider all options and make a decision without interference from Nemo. The consideration period starts when you receive the advance copy of the Credit Agreement. Eight days later, the Credit Agreement for you to sign will be posted to you. This is the only form of communication that you will receive from Nemo during the consideration period. We will not otherwise contact you. The consideration period will end either naturally after the 16 days have elapsed or when your Loan Officer receives your signed Credit Agreement, whichever occurs first.

Consolidation

Combining all your debts into one loan is usually referred to as debt consolidation and can often help reduce monthly payments. Consolidation can be helpful if you have a number of different personal loans and credit cards which you'd like to pay off. Instead of a number of different repayments, these will be wrapped into one affordable monthly payment and you might even have more disposable income, though you may end up paying more in total by making repayments over a longer term.

Consolidation loan

A consolidation loan might be suitable if you have a number of different loans or credit and store cards and want to consolidate several monthly payments into one monthly repayment. You will no longer need to worry about what needs to be paid and when, and you'll even know the exact amount and date payment will go out each month. A debt consolidation loan could help reduce your monthly repayments freeing up more of your disposable income though you may end up paying more in total by making repayments over a longer term.

Credit Agreement

The Credit Agreement will be sent to you 8 days after the Advance Copy Credit Agreement. If you want to proceed with a Nemo loan you will need to sign and return it to us.

Credit Scoring

Credit scoring is used by lenders to help them make their lending decision. When you apply for a secured loan with Nemo, we will take into account your personal circumstances and your credit score. Your credit score is determined by a number of factors including the information you provide to us, any information we may hold about you, and any information which we obtain from credit reference agencies. You can find out more about credit scoring on our credit scoring page.

Credit Scoring Page

DDM

DDM stands for Direct Debit Mandate. You will receive a DDM in your Application pack. The DDM form is used to set up your monthly repayments for your Nemo loan.

Deed of postponement

A Deed of Postponement allows the first mortgagee (lender) to register their loan in priority to Nemo’s loan at the Land Registry. The document allows Nemo’s loan to remain secured by a second charge whilst changes are made to the first charge. The first charge is also known as the mortgage. Nemo takes a second charge, which ranks behind the mortgage. If you are changing mortgage lenders for example, the Deed of Postponement prevents us having first charge (which we are unable to do) when one mortgage lender is removed and another added. If a Deed of Postponement is required because you are re-mortgaging or moving home, contact customer services team on 0845 371 0466.

DTI

DTI refers to Debt to Income ratio. This is a calculation used by Nemo to ensure that we only make loans available to those that can comfortably afford them.

Equity

Equity is the difference between any outstanding loans on a property and the value of the property. For example if a house is worth £150,000 and the only loan outstanding is a mortgage of £100,000 then there is £50,000 worth of equity.

FCA

FCA stands for Financial Conduct Authority and is a regulatory body formed as one of the successors to the Financial Services Authority (FSA). The FCA regulates the financial services industry in the UK. Their aim is to protect consumers, ensure the industry remains stable and promote healthy competition between financial services providers.

Fees

Fees refer to charges made by Nemo Personal Finance for some services we provide. For a full listing of Nemo’s fees see the ‘Our Fees’ section of the website.

Our fees

FLA

The Finance and Leasing Association is the leading trade association for the consumer credit, motor finance and asset finance sector in the UK. Nemo is a full member of the FLA and more information on this can be found on our FLA page.

FLA Page

FSA

FSA stands for the Financial Services Authority. Their primary aims are to promote efficient, orderly and fair markets and to help retail consumers get a fair deal. They regulate many financial services markets including general insurance and therefore regulate the sale of payment protection insurance by Nemo.

Further Advance

A further advance is a term used for taking further borrowing on your Nemo loan. Subject to underwriting we can provide you with extra funds to complete home improvements or to consolidate any further credit you may not have cleared first time around. If you’d like to apply for a further advance call our team on 0800 019 8485.

Gross Income

Gross income is your pay before tax is deducted.

Home improvement loan

A home improvement loan will give you the cash funds you need to make improvements to your property. You could add extra space to your home with an extension, loft conversion or conservatory, or you might like a new kitchen or bathroom. Whatever home improvements you'd like to make, a home improvement loan can give you the finances needed to make the changes you want.

Homeowner

A homeowner is someone who owns a residential property.

Interest

Interest refers to the charge made by us as a lender on the money that you borrow from us. Interest can be variable and go up or down depending on a number of factors including market economics and money market costs.

Interest Rate

This is the figure that determines how much interest you pay. Nemo’s interest rates are not directly linked to the Bank of England Base Rate or the Finance House Base Rate (FHBR). Nemo borrows funds from the money markets and therefore any change in the Bank of England Base Rate or the FHBR will not directly affect Nemo’s interest rates.

LIBOR

LIBOR stands for London Inter-Bank Offered Rate. This is the rate of interest in the London wholesale money market and therefore the rate at which banks and building society borrow money from each other.

Loan

A loan is a sum of money which is borrowed and has to be repaid, usually with interest and often with other associated costs. If you would like to borrow money to make home improvements or consolidate debt, there are many lenders in the market place which are able to help you.

Loan Agreement

A Loan Agreement, sometimes called a Credit Agreement, sets out the responsibilities of both the lender and the borrower. A Loan Agreement provides the borrower with a comprehensive list of terms and conditions of the loan. A Loan Agreement would also detail the amount you have requested to borrow, the APR and the term of the loan. Expected repayments will also be recorded on your Loan Agreement.

LTV

LTV is short for Loan to Value Ratio. When you take out a secured loan, this is the combined sum of your loan and mortgage as a percentage of the value of the property against which your loan is secured. For example, if your property is valued at £100,000 with a first mortgage of £30,000 and a Nemo loan of £20,000 then the total £50,000 of ‘secured’ borrowing would equate to an LTV of 50% (£50,000 / £100,000 x 100 = 50%).

Lump Sum Repayment

A lump sum repayment, refers to making a payment on your loan that is greater than a standard monthly instalment. For more information see ‘Can I make a Lump Sum Payment’ in our Q&A section.

Maximum liability

Some mortgage companies offer flexible mortgages that allow a balance that has been paid off the mortgage to be re-borrowed up to the initial loan limit. The maximum amount you can borrow is referred to as a maximum liability figure as it is the maximum figure your mortgage company is liable to lend to you. If you have this type of mortgage, Nemo needs to use the maximum liability figure as your mortgage balance for our LTV calculation as a mortgage company can release the extra money to you after Nemo has made its loan. If this were to happen there could be further borrowings that exceed the value of the property. As Nemo does not lend on negative equity we need to ensure that your Nemo loan plus the maximum liability figure to your mortgage does not exceed the value of your home. Your Loan Officer will organise obtaining confirmation of the maximum liability figure from your mortgage company and Nemo will cover the cost charged by your mortgage company for the information.

Mortgage

A mortgage is a loan which is usually borrowed to buy a property. This would normally be called the first charge (or first mortgage) on a property. A subsequent secured loan would be considered a second charge (or second mortgage).

Mortgage deed

A Mortgage Deed is the important legal document by which a property owner grants security for repayment of a loan. Your mortgage deed must be witnessed and it must be registered with the Land Registry. A mortgage can also be referred to as a Legal Charge or, in Scotland, will be called a Standard Security. When you repay your mortgage or secured loan, the Mortgage (Legal Charge / Standard Security) will be removed from your property.

Negative Equity

Negative Equity refers to a situation when the borrowing on a property exceeds the value of the house.

Non Regulated Loan Agreement

As of the 6th April 2008 all new Nemo loans are regulated by the Consumer Credit Act. If you are an existing customer and you took a loan over £25,000 with us prior to the 6th April 2008 then your agreement is a Non-Regulated loan agreement. Whether your loan is Regulated or Non-Regulated will affect some aspects of your loan such as your early settlement charges and lump sum repayments. If you are an existing customer with a Non-Regulated loan agreement and you want to apply for a further advance be aware that your account will be closed and a new regulated agreement will be set up. If you took out payment protection insurance that included a cash back benefit on the 5th Anniversary, this will be lost if you settle your loan early. All loan agreements from Nemo Personal Finance Limited will specify whether they are Regulated or Non-Regulated. Should you have any queries our customer services team can give you more information on 0845 371 0466.

Regulated Loan Agreement (secured)

As of the 6th of April 2008 all new Nemo loans, regardless of their amount, will be regulated by the Consumer Credit Act 1974 (CCA) and will therefore have a regulated loan agreement (Prior to that date only Nemo loans of £25,000 and under are regulated). The CCA grants a borrower certain rights which are not necessarily available for loans not regulated under the CCA. These include the need to provide you with an advance copy of your loan agreement to give you a period of time to consider your loan. During this period neither we nor the person arranging the loan for you is allowed to contact you, although you may initiate or request contact. At the end of this period you will be sent signature copies of your loan agreement. The consideration period will end either when you return the signed loan agreement or 8 days after the signature copy of the loan agreement is sent, whichever is sooner.

Second charge

A Second Charge is another name for a second ranking mortgage on your property.

Secured loan

A secured loan is a loan that is secured against your property. The lender, in this case Nemo, then has an interest in the property for the amount of the loan provided. To find out more click here.

Security release fee

A security release fee is a fee charged in certain circumstances for Nemo to release its charge on your property if you have repaid your loan with Nemo. The fee is payable on Non-Regulated loans (loans of £25,000 or more taken prior to the 6th of April 2008). For a full break down of fees charged by Nemo click on the link below, or if you have any questions about a security release fee call our customer services team on 0845 371 0461.

Our Fees

Settlement Quotation / Charge

A settlement quotation is a final figure required to settle your loan with Nemo. It consists of any settlement charge payable for repaying your loan early as well as the amount of your loan outstanding and any interest. If you have any questions about settlement figures or how they are calculated, please contact our Customer Services Team on 0845 371 0461.

Speak Withs

Our Speak With team will usually be the last department within Nemo that you need to speak to before your loan is paid out to you. The team will contact all borrowers to re-confirm the details of your loan and to organise your direct debit. They will also check you have been happy with your loan process and answer any final questions you may have.

Standard security

Standard Security is the Scottish legal document creating a charge over a property, known in England as a Mortgage Deed.

Statement of Account

Nemo can provide a statement of your account on request. This will show your account history over the past year. To request a statement of account please call our customer services team on 0845 371 0461.

Term

Term refers to the number of years you choose to repay your loan over. Nemo offers terms of 3-25 years to help find the right monthly repayment for you. Please be aware that repaying your borrowing over a longer term is likely to increase overall interest charges.

Total Amount Payable

Total amount payable is the total amount you will have repaid on your Nemo Loan once your term has naturally ended. This figure will be the amount you borrowed plus all the interest paid over the life of your term. The figure is calculated on the assumption that interest rates do not change.

Transfer of Charge

If you are moving house then Nemo can, subject to underwriting approval, provide a Transfer of Charge (TOC) which moves our charge on the land registry from one property to another. To discuss a transfer of charge call customer services on 0845 371 0461.

Transfer of Equity

If you want to add or remove a person from your Nemo Loan we can, subject to underwriting approval, provide a Transfer of Equity (TOE) to enable you to do this. To discuss a transfer of equity please call our customer services team on 0845 371 046.

TT

TT stands for Telegraphic Transfer. When we pay out your Nemo loan, for a fee of £30, you can opt to have your cash-out transferred into your account within 24 to 48 hours rather than sent to you in the form of a cheque. If you would like to have a telegraphic transfer then you need to let us know when you talk to the ‘final checks’ team.

Valuation

A valuation is an appraisal carried out by a registered surveyor to determine the value of your property. As Nemo offers secured loans that rely on equity we need to perform a valuation to assess the terms of your loan. Nemo covers the cost of the valuation, which is only for the benefit of Nemo.

Variable rate

Nemo offers loans from £7,500 to £200,000 over 3 to 25 years. All new Nemo Loans have a variable rate which means the rate can change over the term of the loan. If you have any questions about rates speak to our customer services team on 0845 371 0466.

Nemo Personal Finance

© 2014 Nemo Personal Finance Ltd. All rights reserved.

Authorised and regulated by the Financial Conduct Authority.

Registered in England and Wales No. 05188059.

Registered office:
Principality Buildings Queen Street Cardiff CF10 1UA

Nemo is a member of the FLA (Finance and Leasing Association) and follows its Lending Code.

Calls may be monitored or recorded for training, compliance and evidential purposes.

A Nemo loan is secured on your home and is for homeowners with a mortgage only.

Repaying borrowing over a longer term will increase overall interest charges.

If you settle your loan early an additional interest charge may arise calculated under the Consumer Credit Act.

Nemo does not provide homeowner loans for business or investment purposes.

All loans are subject to status.