Glossary - Letter O

Money Healthcheck knows the finance world is full of terms, phrases, buzz words and jargon. The below terms will help you with terms beginning with the Letter O

On this page we explain,
OFT > Ombudsman > Online > Over Draft > Overpayment

OFT

OFT stands for the Office of Fair Trading. The OFT aims to protect consumers by ensuring that trading practices are as fair as possible and by encouraging competition among businesses. one of its responsibilities is the administration and enforcement of the Consumer Credit Act 1974. Any business planning to provide consumers with credit facilities, or refer them to a source of credit, or hire out goods, must first obtain a consumer credit licence from the OFT.

Ombudsman

An ombudsman is an independent professional body which investigates complaints made against professions and businesses when the parties involved have reached a deadlock.
If you're dissatisfied after buying an insurance product or taking out a loan or dealing with another financial company, you should talk to the company itself first. Contact their complaints department or write to the chief executive stating why you are unhappy with their service and why you think you have been poorly treated. This gives them the opportunity to address your complaint and provide compensation for any losses.
There are many different types of ombudsman and If your own attempts fail to bring you a satisfactory response you can contact the relevant ombudsman and ask them to take up your case. If the ombudsman agrees to take on your case and finds in your favour, they can order a company to pay compensation and rebate you for any losses.

Online

Online means connected to the Internet. Online finance refers to doing business or arranging finance on the Internet. The act of doing business or arranging financial products online is also known as e-commerce.
If a web site is fully functional and can be used it is then known as being Online. When a site is incomplete and not ready for use it is then known as being Offline, it may be undergoing maintenance or there may be a problem that needs to be fixed.
When surfing online for finance quotes, you are encouraged to compare the products available on a site to find one that suits both your requirements and budget. When a product has been selected off one provider, you should then proceed to check competitors sites to compare like products. This will enable you to get the best deal you can.
Finance providers place differing emphasis on particular criteria when compiling a finance quote, and for this reason alone it is worth obtaining quotes from several different companies and sites. The more quotes received will increase the customers chances of obtaining better finance quotes.

Over Draft

An overdraft is a facility that the bank will be able to offer you, it enables you to withdraw more money than you actually have in the bank. It is basically a short term loan, although you do not pay interest on it if the bank has agreed this service with you in advance. If the overdraft is not agreed in advance, charges are incurred as a result of going overdrawn.
By using more money than you actually have in the bank ie: using an overdraft you are wasting more money as this is not a cheap way of borrowing money. The interest rate you are charged is likely to be substantially higher than that available on a structured personal loan.

Overpayment

Overpayments are when you are able to pay more than the normal payment charge, as with a credit card, you don't have to pay just the minimum amount requested you can more or all of the debt if you wish. Flexible mortgages also give you the freedom to make overpayments on the monthly premium. By making these overpayments you could manage to pay off your mortgage a lot earlier, therefore saving yourself a lot of money in interest charges.
In order to get the most out of overpayments on a mortgage you need one offering a daily interest calculation. This means every payment you make affects the amount of interest charged to your account.
Overpayments are usually required to have been made before an underpayment will be accepted. However it is worth noting that some financial products do have penalties for early repayment or settlement.