Wonga Jargon Buster: R-Z

Rate

Rate refers to the level of interest charged by a lender – the rate of interest. This may vary depending on your personal circumstances and some lenders provide preferential rates for borrowers they view to be a ‘safe bet’. At Wonga we keep things simple and charge the same rate of interest for everyone we accept.

Redemption penalties

These are fees often charged for the early repayment of your loan, or the repayment of a loan during a period of fixed interest. They are most commonly associated with mortgages and are designed to stop customers easily re-mortgaging to take a better offer from another lender.

Remortgage

The process of changing mortgages without moving home. This is usually done to switch to a new lender who is offering better terms, or to release equity. You use the money borrowed from the new mortgage lender to settle the old one. Most mortgage providers charge an administration fee and you may need to have your home revalued too.

Repayment method

Methods of mortgage repayment. The two main repayment methods are 'interest only' and 'repayment' (see below).

Repayment mortgage

A home loan where you pay back some of the capital as well as the interest each month, meaning the amount you owe is gradually reduced. To start with the repayments usually only cover the interest, but as time goes on the capital starts to reduce too.

Return

This refers to profit received from activities like investing money in shares – a return on your investment.

Secured loan

A secured loan is a loan where the lender has the right to reclaim the loan value from an asset, such as your property or car, should you fail to keep up payments. Mortgages are the most common type. All secured loans are a big commitment and carry significant risk, but you can often benefit from a lower rate of interest. They are typically used for larger sums of money over several years or even decades in the case of mortgages. 

Share

A unit of ownership in a company.

Share certificate

A document that shows the amount of ownership.

Share dealing

The process of buying and selling shares.

Standing order

A method of making regular payments directly from your bank account. The transactions are for fixed sums on specific dates that you tell your bank.

Stock

Another term for a share, or multiple shares in a company.

Store card

Store cards work very much like credit cards, except they can only be used in a specific store, or store group, and often involve higher rates of interest. On the plus side, they can offer you discounts and other benefits while shopping at that store. They're sometimes confused with loyalty or reward cards. It's also important not to confuse store cards with store-linked credit cards –such as those offered by Tesco, Sainsburys, Asda, John Lewis and Marks & Spencer - which can be used anywhere.

Short term loan

Short term loans are considered to be different things by different lenders. A bank for example might consider a loan of one year to be a relatively short term loan. Wonga’s definition is a cash advance for up to 30 days, which you settle with one simple repayment on the date that you choose. Another type of short term loan is a payday loan, although these are a lot less flexible and potentially more expensive than Wonga. 

Transaction

This refers to the movement of money. For example, when you pay money into or take money out of a bank account. It can also refer to a purchase in the case of a transaction with a shop.

Trust

Trust is confidence in the honesty, goodness, skill or safety of a person or thing. Trust is one of the founding principles behind Wonga. Our Trust Rating system means that, as you gain our trust via your responsible use of our service, we gradually raise your credit rating and give you more borrowing flexibility if you ever need it.

A trust is also a legal arrangement in which a person or organisation controls property and/or money for the benefit of another person or organisation. This arrangement is often used for children so that adults can control their financial arrangements until they reach a certain age. Trust can also refer to an organisation that has responsibility for such a legal arrangement.

Unarranged borrowing

An overdraft that is higher than your bank or building society has previously agreed to is classed as unarranged borrowing. This is also called an unauthorised overdraft and usually carries large penalty fees.

Uncleared balance

The amount of money in your account including all the uncleared items in your account and any items paid in during the day.

Underpayment

A loan or mortgage payment that is less than the amount that you should normally pay on a specific date. You may be able to arrange underpayments for a short period with some lenders, if you are unable to pay the full amount for a valid reason like losing your job.

Unsecured loan

An unsecured loan is a loan when the lender does not have immediate rights to reclaim the loan value from an asset, such as your property, should you fail to make payments towards the loan as agreed. An unsecured loan is still a serious commitment and there will be significant penalties if you fail to repay it. Wonga cash advances and most other personal loans are classified as unsecured loans.

Variable-rate interest

An interest rate that you pay on your loan or mortgage that can increase and decrease. These fluctuations are usually in line with a stated index, such as the base rate set by the Bank of England.

Wonga

A slang term for cash or money, used in the UK and especially in London (“A whole lotta wonga”). From the Romany word wanger (coal) - coal was sometimes used as a casual term for money in England in the 18th and 19th centuries.