Money Glossary - L

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Money terms defined on this page:
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• Late payment fee
• Loan amount
• Loan purpose
• Loan term

This is the fee you’ll be charged if your repayment date goes by and you haven’t paid your lender. If you’re having trouble with repayments, always talk to your lender before the repayment date if possible – they are more understanding than you might think. If you don’t contact them, the late payment fee could be around £20.
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Loan amount

This is the amount you need to borrow. The amount offered will differ from lender to lender, and with the type of loan. You can normally borrow more if you choose a secured homeowner loan rather than a personal loan.
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Loan purpose

You may have to declare why you want the loan. Most purposes are fine with most lenders: debt consolidation, home improvements, large purchases, holidays, etc. Many lenders won’t give you a personal loan for speculative or risky purposes (eg buying shares or starting a business).
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Loan term

Your ‘loan term’ is the amount of time, in years or months, you borrow the money for. You must agree a loan term when you first borrow the money, so that your lender can work out how much you should be repaying per month. The shorter the loan term, the better: if you borrow for a longer time, your loan will accrue more interest.
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