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lay-by

When goods are paid for over time by payment of a deposit and then regular amounts over a certain period. You cannot take home the goods until you have paid the full price.

lease

A document that grants someone the use of a property for a given period in return for rental payments. The document will specify the terms and conditions of the agreement.

liability

A debt or money owed, for example, a bank loan or credit card debt.

life cover

An insurance policy that pays a set amount of money to an insured person’s beneficiaries when the insured person dies. Also known as term life insurance or death cover.

limit

The amount of calls, texts and data you can use in your plan each month. If you go over your limit, there is usually an extra charge.

line of credit loan

Allows you to use a single account for your home loan and everyday spending. Interest is added to the loan each month and repayments are not necessary while the loan is within its credit limit. It allows you access to the equity in your home without having to apply for a new loan.

liquidity

How easily an investment or financial product can be converted to cash. Shares in large publicly listed companies that are regularly traded on the ASX (Australian Securities Exchange) are considered liquid assets, while direct property investments are less liquid, due to difficulties and time delays that may be experienced when buying and selling. Liquid markets have enough trading activity to allow both buyers and sellers to easily transact as they wish.

loan consolidation

When several loans are combined into one, with the aim of reducing repayments. Also known as debt consolidation.

loan to value ratio (LVR)

The amount of a loan as a percentage of the value of the asset it was used to buy. It is calculated by dividing the loan amount by the value of the asset.

locked phone

A phone that is locked to one service provider that will not work if you leave that provider.

low-doc loan

A loan that requires little financial documentation. Primarily for borrowers who do not meet the standard loan application criteria.

LVR

See loan to valuation ratio.

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