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Managing Your Money

Jargon Buster: Simplifying Financial Terms

Is the fact that you don’t understand financial lingo holding you back? Are you confused by financial terms when applying for a loan?

Let’s explore some of the most common financial jargon that our members come across to help clear things up for you.

Additional Borrowing

When you top-up a loan, we don’t actually add money to it. Instead, we set up a new loan for the remaining balance and the extra amount you want to borrow. We pay off your old loan from that total and, if the new APR of the loan is lower, take a £50 administration cost from your savings secured against the loan, and transfer the new amount into your account.

The new loan may have a different interest rate from your initial loan, and the term might be different too. This may mean that you could pay more or less interest than before.

Agreement in Principle

An Agreement in Principle is a written estimate or statement made by a lender to say how much money they would lend you if your loan application was to be accepted. This is based on the information you have provided us.

Closing balance

Our member’s closing balance can be found on their statement which is posted to them at the end of every financial year.

For any concerned members, ‘closing balance’ does not mean we’ve closed your CCU account. It is the sum of everything above it in the account.


The money lent or borrowed under a credit arrangement. This arrangement will lay out the terms and conditions, APR (interest), repayment period (how many months you will repay), and so on. In simple terms, credit is when you receive money with conditions attached to it. Example – loan or credit card.


A payment made or owed. In simple terms, debit is when you give money and this is deducted from your bank account. Example – using your debit card to purchase something.


To understand what we mean by dividend let’s first explore how credit unions work.

Members make regular savings and these savings form a common pool of money from which loans are issued to members. The interest charged on loans is the credit union’s main income. Once the operating costs of the credit union have been deducted, money is returned to members in the form of a dividend.

The dividend will be paid annually and gross of tax and is subject to surplus and approval by members at the AGM (not guaranteed).

Free loan protection insurance

Free loan protection insurance is a unique benefit to members of CCU. Members are covered by our loan protection insurance up until the day of their 70th birthday.  The insurance would see the balance of their credit union loan (subject to a maximum individual member limit of £25,000) paid off in the event of their death. Six month pre-existing condition limitations are in place and no cover is provided from the day of the member’s 70th birthday. T&Cs apply – see website for details.

Nominated account

Your nominated account is the bank account which is connected to your CCU savings account. This is the account used to add or remove money from your account with us.

Hopefully you learned a thing or two and this clears up some of the confusion around financial jargon. If in doubt email our team at and we’ll be happy to help.

Payroll Deduction

Payroll Deduction offers a simple, convenient route to saving. If your employer is one of our Select Partners then you qualify for setting up payroll deduction. You simply choose how much you want to save each month from your salary and we set up a regular saving plan with your payroll representative.

As this money comes into your CCU savings account before you receive your wages, members find it very easy to build up a nest egg without much effort. You always remain in control and can change the saving amount deducted or cancel the payroll deduction at any time.

If you want to find out more, feel free to contact us at and we’ll be happy to explain more about it.

Representative APR

When a loan is advertised with a representative APR, it means that at least 51% of customers receive a rate that is the same as, or lower than, the representative APR – although not everyone within the 51% will necessarily get the same rate.

Select Partner

We’ve been offering payroll deductions since the beginning – over 30 years ago. We have over 75 partnerships where many members benefit from direct payroll savings.

Our select partner employers come from a range of different organisations. From public sector, to large and small commercial ventures, to local charities, and retailers large and small. In fact, any employer operating in our common bond area can sign up to enable their employees to save for a rainy day, access affordable credit, or a mortgage, and to build their financial future with us.


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