Glossary - S, T, U

S

Secured Loan

With a secured loan the debt is generally secured on your house or property, meaning defaulting could put you in risk of losing your home. With hire purchase (Car finance) the loan is only secured on the vehicle, meaning that in the worse case scenario a default would only result in possible repossession of the vehicle or legal action not loss of your home.

T

Trade value

The trade value of a vehicle is what you can expect the vehicle to be worth to a dealership or to a car trader. Generally this is what dealer will offer you as a part exchange value. This is normally less than you would get if you sold the vehicle privatley.

U

Unsecured Loan

Offered by many compaines these loans are not secured. The problem that can arise is, as the loan is unsecured many banks and loan companies are very strict with who they lend too - therefore people that have had unavoidable credit problems or even a few missed payment may be declined. With car finance the loan is secure only on the vehicle, making lenders happy as they have securty on the loan and therefore are more likely to grant finance to people with previous credit problems.

Other terms