A
Amortisation
The gradual repayment of a loan through regular instalments, each split between interest and principal. An amortisation schedule shows that split for every month of the loan. Open the tool →
Annual Percentage Rate (APR)
The total annual cost of a loan expressed as a rate, including the interest rate and every mandatory fee. The only fair way to compare two offers. Open the tool →
B
Balance transfer
Moving an outstanding loan to a new lender offering a lower rate. Worth doing when the rate gap and remaining tenure are large enough to clear the switching cost. Open the tool →
Bullet repayment
A structure where you pay only interest during the loan and repay the entire principal at maturity. Common in gold loans. Open the tool →
C
CAGR
Compound Annual Growth Rate — the constant annual rate that would take an investment from its starting value to its ending value. Used to compare investments held for different periods. Open the tool →
CERSAI
The central registry where lenders record security interests over property, so a second lender can see an existing charge.
CIBIL score
A credit score from 300 to 900 issued by TransUnion CIBIL, summarising your repayment history. 750 and above secures the best rates. Open the tool →
Circle rate
The minimum property value set by a state government for stamp duty purposes. Duty is charged on the higher of the circle rate and your transaction value. Open the tool →
Co-applicant
A person who applies for a loan jointly with you. Their income is pooled with yours for eligibility, and they share liability for repayment. Open the tool →
Collateral
An asset pledged to secure a loan, which the lender can sell if you default. Secured loans carry far lower rates because of it.
Compound interest
Interest calculated on the principal plus previously accumulated interest, so the base grows each period. Open the tool →
D
Disbursal
The moment the lender actually releases the loan money, which can be in one payment or in stages for an under-construction property.
E
EMI
Equated Monthly Instalment — the fixed monthly payment covering both interest and principal until a loan is repaid. Open the tool →
Encumbrance certificate
A document from the sub-registrar showing all registered transactions on a property, used to confirm clear title.
EPF
Employees' Provident Fund — a statutory retirement scheme where you and your employer each contribute 12% of basic pay. Open the tool →
F
Fixed rate
An interest rate that does not change for an agreed period. Predictable, usually higher than floating, and can carry prepayment charges.
Flat rate
Interest charged on the original loan amount for the whole tenure, regardless of repayment. Roughly 1.8 times the equivalent reducing rate. Open the tool →
Floating rate
An interest rate linked to an external benchmark such as the repo rate, which moves as the benchmark moves. Cannot carry prepayment charges for individuals.
FOIR
Fixed Obligation to Income Ratio — the share of your net monthly income a lender allows to be committed to EMIs, typically 50% to 60%. Open the tool →
Foreclosure
Repaying the entire outstanding balance and closing a loan ahead of schedule. Open the tool →
G
Gratuity
A statutory payment for continuous service of five years or more, calculated as 15/26 of last drawn pay per completed year. Open the tool →
Guarantor
Someone who agrees to repay a loan if the borrower defaults, without being a co-owner of the asset.
H
HRA
House Rent Allowance — a salary component that is partly exempt from tax under Section 10(13A), available only in the old regime. Open the tool →
Hypothecation
A charge created over a movable asset, such as a vehicle, while the borrower keeps possession. Recorded on the RC until the loan closes.
I
Input tax credit
Credit a GST-registered business claims for GST paid on purchases, set off against GST collected on sales. Open the tool →
L
Lien
A lender's legal claim over an asset until the debt is repaid.
LTV
Loan to Value — the share of an asset's value a lender will finance. Capped at 75–90% for home loans and 75% for gold loans. Open the tool →
M
Marginal relief
A provision ensuring that tax just above a threshold never exceeds the income earned beyond that threshold. Open the tool →
MCLR
Marginal Cost of Funds based Lending Rate — an older internal benchmark, largely replaced by external repo-linked rates for retail loans.
Moratorium
An agreed pause in EMI payments. Interest continues to accrue and is usually added to the principal. Open the tool →
N
NBFC
Non-Banking Financial Company — a lender that is not a bank. Typically faster and more flexible than banks, and more expensive.
NPS
National Pension System — a market-linked retirement account with an extra ₹50,000 deduction under Section 80CCD(1B). Open the tool →
P
PPF
Public Provident Fund — a 15-year government-backed scheme with fully tax-free interest and maturity. Open the tool →
Pre-EMI
Interest-only payments made on the amount disbursed so far, before full disbursal on an under-construction property.
Prepayment
Paying more than your scheduled EMI to reduce the principal, which cuts total interest and shortens the loan. Open the tool →
Principal
The amount actually borrowed, excluding interest.
Processing fee
A one-time charge for evaluating and setting up a loan, typically 0.25% to 3% and usually deducted from the disbursal. Open the tool →
R
Reducing balance
Interest charged only on the outstanding balance, which falls as you repay. The standard for home, personal and most bank loans. Open the tool →
Repo rate
The rate at which the RBI lends to commercial banks. Floating retail loan rates are linked to it, so they move when it changes.
RERA
The Real Estate (Regulation and Development) Act, requiring developers to register projects and disclose timelines. Never buy an unregistered project.
S
Sanction letter
A lender's formal written offer stating the approved amount, rate, tenure and conditions. Valid for three to six months.
Section 24(b)
The provision allowing up to ₹2 lakh a year of home loan interest to be deducted on a self-occupied property, in the old regime only. Open the tool →
Section 80C
A deduction of up to ₹1.5 lakh a year for PPF, ELSS, EPF, life insurance premiums, home loan principal and tuition fees. Old regime only. Open the tool →
Section 80E
A deduction for the entire interest paid on an education loan, with no upper limit, for up to eight years. Open the tool →
Section 87A
A rebate that removes tax entirely for taxable income up to ₹12 lakh under the new regime, or ₹5 lakh under the old. Open the tool →
Simple interest
Interest charged only on the original principal, never on accumulated interest. Open the tool →
SIP
Systematic Investment Plan — a fixed monthly investment into a mutual fund, which averages your purchase price over time. Open the tool →
Spread
The margin a lender adds to the benchmark rate to arrive at your rate. Negotiable for strong applicants, unlike the benchmark itself.
Stamp duty
A state tax on property transfer, between 4% and 8% of value, payable in cash at registration and never financed by the loan. Open the tool →
Step-up EMI
A repayment structure where the instalment rises by a set percentage each year, matched to expected income growth. Open the tool →
SWP
Systematic Withdrawal Plan — redeeming a fixed amount from a mutual fund at set intervals, commonly used for retirement income. Open the tool →
T
TDS
Tax Deducted at Source — tax withheld by the payer and deposited against the payee's PAN. Open the tool →
Tenure
The period over which a loan is repaid. A longer tenure lowers the EMI and raises total interest. Open the tool →
Title deed
The document establishing legal ownership of a property.
Top-up loan
Additional borrowing on an existing home loan, usually at a rate close to the home loan rate and far below a personal loan.
U
Underwriting
The lender's assessment of whether to lend to you, and on what terms, based on income, credit history and security. Open the tool →
V
VPF
Voluntary Provident Fund — contributing more than the statutory 12% to EPF, earning the same tax-free rate. Open the tool →