We thought we should start at the beginning, so here are some basic definitions about personal finance we think might help you:
- Interest – Interest is the fee paid by the borrower to the owner as a form of compensation for the use of an asset. More than likely, this asset, will take the form of a loan or credit card.
- BACS – BACS is a form of electronic payment for processing a financial transactions. These will take three whole working days to clear.
Day 1: Payment is entered onto the system.
Day 2: Payment is processed.
Day 3: Payment is cleared.
- Capital – These are the funds (the original loan amount) provided by lenders to another party (person or businesses).
- APR – Annual percentage rate. See our other blog post about this!
- eAPR – effective APR is the fee+compound interest rate (calculated across a year).
- Compound interest – When compound interest is placed on your original loan amount, from that moment on, the interest that has been added also earns interest.
Pay attention to our regular series of budgeting blogs too, as they will be able to help ease the stresses that are placed on us all by our finances.