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We have compiled a group of some
relevant terms related with personal loan financing. If you have any
questions or comments, please
contact us.
Balloon Payment
A large final payment due at the end
of a loan or lease. (Allows a lower monthly payment.
Amortization
The repayment of a loan or debt in
regular payments. Each payment is split into a primary repayment and
an interest fee.
Collateral
The pledge of a valuable item, like a
home or car, to guarantee repayment of a loan.
Acceleration Clause
Allows the lender to speed up the
rate at which your loan comes due or even to demand immediate
payment of the entire balance of the loan should you default on you
loan.
Compound Interest
Interest payable on income and its
accumulated interest. On the contrary, simple interest which is paid
only on the principal.
Asset
Property and possessions that can be
used to secure a debt.
Consumer Credit
A loan to an individual to purchase
goods and/or services for personal, family or household use.
Cosigner
A credit-worthy person, other than
the borrower, who agrees to repay the debt if the borrower fails to
do so.
Credit Profile
A picture of how you (as an
individual) paid back the companies you have borrowed money from, or
how you have met other financial obligations.
Lease
Contract by which the owner of
property allows another to use it for a specified time, usually in
return for payment.
Depreciation
The decline in value of an asset over
a period of time.
EMI
A fixed payment made monthly, known
as Equated Monthly Installments.
Credit
An arrangement that allows a person
to receive cash goods or services now and pay for them in the
future.
Principal
The capital sum as different from
interest or income.
Lending Rate
The interest charged by the financier
on the amount financed.
Margin Money
Financiers do not fund the full value
of the asset. They expect the customer to bring a certain % of the
asset as margin. This is called Margin Money.
Loan Tenure
The time duration for which a loan
has been provided.
Risk
Chance or danger of a loss of capital
and or interest in financial transaction.
Stamp Duty
Government levies a duty on certain
legal documents and financial contracts.
Statutory Charges
These are charges like stamp duty,
sales tax etc which are imposed by the government.
Standing Instructions
Instructions to a bank to debit a
fixed amount from your account and pay your financier.
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