Glossary

AAAPR

The average annual percentage rate (AAPR) wraps up interest payments and fees and expresses all these costs in one rate. It is designed to reflect the total annual cost to a borrower of a loan. All lenders must disclose this benchmark rate in their advertising of home loans and personal loans from July 2003. In Australia, the AAPR is officially called the 'Comparison Rate'.

Accrued Interest

Interest calculated and added to the interest amount payable, but which is not yet paid.

Amortisation

Scheduled repayment of a loan through regular instalments over a period of time (e.g. weekly, fortnightly or monthly repayments over a 30 year term). The borrower pays the interest and part of the principal in each repayment. Contrast to "Interest Only Loan".

Application Fees

Fees that Lenders charge to consider a loan application. These are paid up front and are usually not refundable unless the loan is refused.

Arrears

The total of overdue loan repayments.

Assets

Real estate, securities, cash and other goods owned by individuals.