Glossary | Funding

GLOSSARY

Glossary

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There are 11 Terms in this directory beginning with the letter D.
Debt Consolidation
Debt consolidation is the act of taking out a new loan in order to pay off other outstanding debts, usually with the objective of lowering the average cost of the finance or for ease of managing outstanding debt obligations.

Debt Lending
Debt lending is the act of a business raising capital by borrowing. In most cases this is done by companies issuing bonds or other debt security.

Debt Service
Debt service is the amount of money required to pay back the interest and principle on a debt. For example, when borrowers are paying back a debt it is known as ‘servicing the debt’.

Deed
A Deed is a written legal document that transfers ownership of property. The deeds of a property include a description of the property and the names of new and old owners. It is signed by the individual transferring the property.

Default
Default is the failure to repay a loan according to the terms set out in the contract.

Demographic
The study of demographics relates to understanding the population based on different factors such as age, sex, income, employment type. Demographics allow companies to access their potential market. For example, a company selling high end luxury cars would benefit from knowing how many people earn over $60,000 in order to be able to afford the product.

Depreciation
Depreciation is a reduction in the value of an asset overtime. For example, the economic crisis in 2008 saw share prices depreciate by as much as 50%.

Discounted Cash Flow
Discounted Cash Flow or DCF is a measure used to understand the attractiveness of an investment. The method uses future free cash flow estimates and compares them to the present value estimate.

Distributions
Distribution is known as a companies’ payment of stock, cash or physical assets to its shareholders. In funding.com.au’s case, the distributions are monthly, that’s monthly payments of interest.

Diversification
Diversification is a risk management technique used by investors to ensure a wide variety of investments are made across one portfolio. For example, if you were to diversify your investments using Funding.com.au you could invest across loans in different locations, with different LVR’s.

Due Diligence
Due Diligence is the process of audit or investigation on a person or company prior to becoming involved in a business arrangement. For example, we carry out thorough due diligence on all of our borrowers from background checks, independent valuation reports and occasionally we also do site visits.