A student loan can be a good opportunity to bridge the funding gap, however it is important that students fully understand loan terms. Our glossary!

28% of students in the UK worry that they won’t be able to finish their degree due to financial reasons. A student loan can be a good opportunity to bridge the funding gap, however it is important that students fully understand loan terms.

We at Future Finance, want to help you understand everything around our loans and have prepared the below Glossary for you.


APR stands for Annual Percentage Rate. It describes the actual yearly cost of funds over the term of a loan. This rate includes any fees or charges associated with your student loan. In our case this would include the origination charge for example.

Continuation Rates

A continuation rate describes the likelihood that you will continue your studies. Continuation rates are generally lower for 1st year students than for 2nd year, since more students drop out or change their course after their first year.

Credit History

Your credit history helps us determine how responsible you are when it comes to repaying your debts. It includes information such as credit accounts, late payments, defaults or loan applications.

Early Repayment

Early repayment of this loan will result in less interest paid and reduce the loan term. There are no extra fees involved. You may also make un-scheduled additional repayments towards your loan. There are no extra fees involved also. All loans are set at a standard 10 year loan term from date of graduation to ensure repayments are spread out to drive down the monthly repayments and in turn give graduates a higher net disposable income.

Employment Rates

The employment rate is depending on your university and course. It describes the likelihood of you entering a full-time job after graduation. The higher the employment rate is for your course, the better the chances for your loan to be approved.

Equifax Credit Score

There are different systems that can be used to determine your credit score. We use a provider called Equifax, they calculate credit scores based on your credit history. An Equifax credit score is typically a 3-digit number between 300 and 850, the higher your credit score the better it is. Please note that loan applications will affect your credit score.


A guarantor is someone that guarantees to pay your debt if you should fail to repay your student loan. In most cases it would be a parent acting as a guarantor for students. The majority of our applicants will need to provide a guarantor, therefore it would be good to have a possible guarantor in mind when starting your application.


The LIBOR (London Interbank Offered Rate) is a benchmark rate that banks use to calculate interest rates on loans. The calculation is based on 5 currencies (USD, EUR, GBP, JPY and CHF). Future Finance loans are based on LIBOR, the interest rate can therefore go up or down during the loan term.

Origination Charge

An Origination charge is added to your loan amount at set-up. This charge can be described as a set-up fee, which covers administrative costs.


PFA stands for Predicted Future Affordability. It is a metric we use based on university data; it considers your university, the course, degree type, employability rate, graduate salaries and so forth.


Underwriting describes the process of assessing your application. During this process our team will check your credit history, future affordability and the amount requested. They will then decide whether or not your application for a Future Finance student loan was successful.


In order to assess your application we need to verify various documents. We will need to contact your university, to check your enrolment. If you are currently employed or have previous income history we will need to verify this with your employers. Most applicants require a guarantor and in these cases we will also need to verify your guarantor’s employment and income details.

We hope you find this student loan glossary helpful. If there are any other terms you do not understand, please leave a comment below or contact us directly at hello@futurefinance.com

If you wish to apply for a Future Finance student loan please click here.