Glossary of terms

Glossary of terms

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Unit trusts

A type of managed fund. Managed funds work by pooling money from a number of investors and then using this money to buy a variety of investments. In a unit trust, each investor owns a proportion of the total fund.

Glossary: Managed funds
Unsecured loan

A loan which is not secured against any of the borrowers assets and hence is more risky than a secured loan. In order to compensate for this, the lender will charge a higher interest rate.

Glossary: secured loan
A secured loan is secured against some or all of a borrower's assets decreasing the risk associated with the loan. If the borrower defaults on the loan, the lender may get some/all of these assets in order to cover the loan payments.
Glossary: interest
Money paid in return for the use of money. If the bank is using your money (in a savings account) they pay you interest. If you are using the bank's money (via a loan), you pay the bank money.