G

Garage credit card

A garage credit card offers cardholders credit facilities that can be used to pay for petrol and various other vehicle-related expenses.

Goodwill

Goodwill refers to 'intangible assets' such as a good location, business reputation, or exclusive trading rights.

Grace period

Grace period refers to the period of time during which a loan instalment may be settled, after its due date, without the borrower incurring penalties for late payment. 

Gross profit

Gross profit is calculated by subtracting total cost from total sales. Essentially, it is the 'pure profit' of a business.

Guarantee

A guarantee is a financially binding document drawn up to ensure that a particular institution (the guarantor) fulfils its obligations as stipulated in a contractual agreement. It usually guarantees that a certain amount of money will be paid on the condition that a certain event occurs. Examples are tender guarantees, advance-payment guarantees and facility guarantees. 

Guaranteed option to purchase

This is a clause in a vehicle lease agreement that entitles the leaseholder to purchase a vehicle once the term of the lease has expired. Usually, the price of the vehicle is agreed on as part of the contract. 

GPRS

General Packet Radio Service.

H

Handling fee

Handling fees are charged to clients, usually by banks, for processing the paperwork involved in a particular transaction. 

Harmonised System Product Code (HS Code)

The Harmonised System Product Code, or HS Code, is the international system whereby goods are classified according to standards for customs processes.

Hedging

Hedging refers to measures that individuals or other entities take to protect themselves from risk. Essentially, 'hedging' minimises business risk without minimising investment profits too drastically.

Hire purchase

Hire purchase refers to a legal agreement whereby an individual hires goods for a specified period and for a set price that is paid in instalments. If all the instalments are settled during the stipulated term, the goods become the individual's property. 

Home loan application

 A home loan application is a document containing relevant information about a person applying for a loan.

I

Instalment amount

The instalment amount is the basic monthly sum payable on a loan, excluding any insurance or assurance premiums that may apply. 

Institutional investors

Institutional investors, also referred to as professional investors, only engage the market on behalf of their members. Some examples of institutional investors are banks and pension funds.

Insurance

Insurance is a service that promises reimbursement in the case of loss or damage to assets. Individuals or companies concerned about potential hazards will make payments towards an insurance policy (usually in monthly premiums), which will then pay out in the event of loss or damage.

Interest

Essentially, interest is how much it costs to use money that is not your own. For example, if a person borrows money from the bank, he/she needs to pay for this service by means of interest, which is calculated on the size of his/her original loan. On the other hand, the bank pays interest to people who deposit money at the bank. 

Interest rate

The interest rate is the method of determining exactly how much it costs to borrow money from a lending institution such as a bank. For example, if the interest rate is 5%, it means that the lender must pay the bank 5% of the original loan amount. 

Internet banking

This is an electronic banking facility that allows clients to complete financial and banking transactions online.