LOAN DICTIONARY

A fee that is always charged to the customer on a monthly basis while the loan or credit is available to the customer.

The fee charged by the bank to the credit card in euros, regardless of whether the card is used or not.

In the case of an annuity loan, the installments change according to the development of reference interest rates and the term of the loan remains the same. For example, if the loan is linked to one-year Euribor, the reference rate is reviewed annually and the installments are either reduced or increased according to the interest rate.

Reference rate that the bank may change by unilateral decision.

Usually an individual or sometimes a company that borrows money, i.e. the borrower takes a loan from the lender. Taking out a loan always entails a payment obligation in accordance with the terms of the loan.

The client pays only interest during the loan period and the entire loan is repaid in one installment at the end of the loan period. Such a loan is useful if the customer has many other loans with a higher real annual interest rate. The agreement gives the customer time to repay the more expensive loans first.

Loan taken to finance a vehicle. Usually, the acquired vehicle acts as collateral for the loan, so the interest paid on it is lower than the unsecured loan.

Collateral required for granting a mortgage loan, eg deposit, loan insurance, personal guarantee.

A service that makes it easier for a loan applicant to find the most suitable loan offer. Comparing loan offers also saves money.

A loan that is usually taken out to finance various consumption needs, such as goods and services.

A card combined with both credit and debit card features.

With a credit card, you can pay within the credit limit, even if you don't have money in your bank account. Purchases made with credit will later be paid on the basis of an invoice.

Always checked together with the credit decision. The credit information indicates the customer's possible payment difficulties.

Always performed as part of the creditworthiness assessment of the credit reporting company.

A separately agreed period during which the loan does not have to be repaid, but it is sufficient if you only pay the costs and interest related to the loan. This can be useful if you have temporarily less income or more expenses than usual. The period can be from one month to several years. However, keep in mind that your loan capital will remain the same during this time.

This is always done before the loan is granted and is a legal obligation of the bank. The result of the assessment shows the probability that the customer will be able to meet its loan obligations to the bank. The credit assessment is based on the information requested from the customer in the application, the bank's own information about the customer and information about the customer from external registers permitted by law. In general, adding a co-applicant will improve your credit rating and loan options, as well as lower the total cost of the loan.

A payment card that can only be used if there is money in the bank account connected to it.

A payment made with an automatic payment order. (Usually on online banking service)

An e-invoice is an invoice that is transmitted electronically directly to the customer's own online bank. Usually cheaper than a paper invoice sent by post.

The Euribor interest rate is the interest rate quoted on the market on a daily basis (eg 1,3,6-12 months), which is usually used as the reference interest rate for loans.

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Similar to a credit vacation, but you don't even have to pay interest or other loan-related expenses, they are capitalized on your loan. So you don't have to pay anything on your loan during this period. Please note that your loan capital will increase as a result of the payment waiver.

A loan what interest rate is agreed at the beginning of the loan for the entire loan period. Another option is to take out a variable rate loan. When taking out a fixed rate loan, notice the interest rate and the total amount of the loan for the entire loan period - the interest rate is fixed, as the name implies.

Gross income means your income before tax.

The customer's collateral can be, for example, a housing part, real estate or other real collateral suitable for the bank.

Change in consumer prices.

Amount to be paid to the bank on a monthly basis. Includes both interest and loan costs and the contribution paid for the principal. The shorter the loan period, the higher the installment if the loan amount and price are the same.

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It is regulated by the Interest Act and the customer must pay it to the bank if the installment is overdue.

Determined on the basis of the mortgage reference rate. For example, the interest period of a 12-month Euribor loan is one year.

One nickname for a consumer credit that refers to its easy availability and flexible repayment.

Borrowing costs, measured as the annual percentage rate of charge, which cannot be charged to the law for loans of less than EUR 2000. It can also mean a product that a bank sells for a loan (usually a mortgage) in which the customer pays for the interest rate on the loan not to rise above the interest rate cap for an agreed period of time.

Usually the company gives the loan or sometimes the individual who borrows the money, i.e. the lender gives the loan to the borrower.

A loan agreement between a lender and a borrower. The exact terms of the agreement are defined in the loan agreement, which can also be called a bond.

The loan amount borrowed from the bank is the original loan amount. Upon repayment of the loan, the principal of the loan decreases, but the disbursements do not affect the loan amount.

Appendices must normally be submitted to the bank as part of a credit rating. The notes can be used to assess the loan applicant's income and financial position. The necessary supplements can be, for example, a tax refund, the last payslip, a pension decision or a confirmation of additional income. The company is also required to provide summaries of the company's income statement and balance sheet.

Before making a credit decision, a loan application must always be submitted to the bank. The application can be submitted, for example, by phone, online systems, mobile or in writing.

The loan applicant can test the effect of various loan parameters, such as the loan amount, loan period or interest rate and loan costs, on the amount of the monthly payment.

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Means loan repayment. Often the loan is repaid monthly, but there are also, for example, 3, 6.12-month repayment intervals.

The period agreed with the bank during which the loan or credit must be repaid to the bank. The period can vary from days to several years.

A loan what interest rate may vary during the term of the loan. Many people prefer fixed rate loans because interest costs are known and they are not such unpleasant surprises.

An insurance product that can be used to replace missing self-financing as collateral for a mortgage loan.

The fee charged by the bank to the loan customer in connection with the withdrawal of the mortgage.

The percentage that the bank adds to the agreed reference rate. The total interest is calculated as the sum of the reference rate and the margin. The margin is usually customer-based and is based on the bank's assessment of the borrower's risk and return.

See installment

Usually a long-term loan to buy a home. Because real estate is considered safe collateral, mortgages are usually the cheapest possible way of financing for an individual.

Fee charged by the bank to the loan client in connection with the withdrawal of the mortgage.

Consumer loan, which, after withdrawal, is repaid in full in accordance with the loan agreement.

A banking service that a customer can access online using personal IDs to make payments and other banking transactions.

An online payment that usually requires a credit card or online banking ID.

A method of financing used in the car trade, where the customer pays the down payment and the debt in installments and the car acts as a collateral.

The agreed payment term of the loan installment, ie the date when you have to pay the payment from your bank at the latest. The payment order must be made no later than the due date, but the money does not have to be in the payee's account by the due date.

Check payment default register register

Negative entry in a person's credit information. Submission of credit information is a statutory activity performed in Finland only by Asiakastieto Oy and Bisnode Finland Oy. This is usually due to non-payment of a loan, rent or invoice.

A form of collateral used as additional collateral for a loan, where another person guarantees the agreed amount with its nominal guarantee.

The difference with a regular credit card is that the card must be charged with the money. If there is no money on the card, you will not be able to pay with it.

All costs related to the loan are included in the real annual interest rate.

The part of the mortgage interest rate to which the customer-based margin is added. Euribor rates are the most common reference rates.

Several small loans are repaid and replaced by one larger loan.

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In mortgages, the part previously saved by the client, which covers part of the purchase price of the apartment.

Banks may charge fees or service fees related to the loan, such as agreement, monthly or annual fees. All fees and expenses that the client cannot avoid must be included in the effective annual interest rate

Costs that a bank can take for a loan or credit. This cost is always bank-specific and usually depends on the loan amount. It can be added to the loan principal or subtracted from the loan amount paid to the customer's account. However, this cost must always be included in the actual annual interest rate on the loan provided by the bank, so it is worth comparing it between different credit options.

Loan for unexpected and short-term needs that can be applied for easily and quickly. The costs, especially in terms of real annual interest rates, are quite high, which is why the products have received a lot of negative publicity.

The borrower's ordinary income must be sufficient to repay the loan so that there is enough money for other expenses and living.

The European Consumer Credit Information form must be provided to the customer prior to the conclusion of the credit agreement and must contain basic credit information on the agreement and the consumer's rights. The submission of the form is a legal obligation that entered into force on 1 December 2010 with the reform of the Consumer Protection Act.

To be completed as part of the credit decision. In doing so, the bank determines whether the customer has sufficient means of payment to settle the monthly installments of the loan.

Mortgage lending test, where, for example, the solvency of a loan customer is determined at an interest rate of 6%.

Loan to finance studies. It is possible to apply for a state guarantee for a student loan.

The Central Bank of Finland, which is a member of the European System of Central Banks at the time of joining the euro.

A product characterized by the fact that the monthly payment is always the same throughout the loan period. Instead, the monthly installment changes due to interest expenses as the loan is shortened and interest rates may change.

Ongoing credit that is constantly available to the borrower. The borrower can pay the loan in installments and also withdraw it according to the need and situation.

Amount of installment to be repaid regardless of the loan amount. It can be agreed either in euros or as a percentage of the loan principal.

Refers to the collateral provided for the loan; banks can provide consumer loans against collateral or based solely on the customer's solvency. The interest rate on unsecured loans is usually higher because the credit risk associated with them is higher for the bank.

A product that can be used as part of a mortgage collateral. A warranty fee must be paid as an expense

A financial sharing economy where an individual lends money to another person. In general, operations focus on a peer-to-peer loan service, which takes care of the operational service and forms loan pools that meet the requirements of individual loan offers.

Withdrawal fee is a fee charged by the bank for automatic withdrawal of money from a credit card.