24 Hour Loans glossary of financial terms

Arrears

You build up arrears at any time that you fail to make your regular repayments on a loans product. So, if you have a mortgage, for example, and don?t pay your monthly repayment for two months then you?ll have two months of mortgage arrears against your name. The same situation applies for any type of loan or other finance product where you don?t pay what you should when you should.

Arrears are logged on to your financial history via your credit record. So, if you don?t make loan repayments for six months, for example, then this fact will appear on your credit rating and it will be seen as a negative point against you. If you apply for further finance at some point in the future, then your new lender may reject your application or charge you higher rates because of the arrears that appear. Arrears will be recorded on your history for a number of years.