The vocabulary of Indian lending, without the jargon.

APR (Annual Percentage Rate)

The all-in yearly cost of a loan including interest and fees, as disclosed in the Key Fact Statement.

Balance Transfer

Moving an existing loan to a new lender offering a lower rate or better terms.

CGTMSE

A government guarantee scheme that lets banks lend to MSMEs without collateral.

CIBIL Score

A three-digit credit score from 300 to 900 that summarises your repayment history.

Co-applicant

A second borrower whose income and credit are considered along with yours, sharing repayment responsibility.

Cooling-off Period

A short window after disbursal in which you can exit a digital loan by repaying the principal and pro-rata interest.

Credit Report

The detailed record behind your credit score: every account, balance and payment.

Digital Lending

Loans sourced, assessed and serviced largely through apps and online platforms, governed by RBI's 2025 directions.

Disbursal

The release of loan funds to you, the seller, the builder or the dealer.

DSA (Direct Selling Agent)

An outsourced agent who sources loan customers for banks and NBFCs and is paid on disbursal.

EBLR (External Benchmark Lending Rate)

A bank's lending rate linked to an external benchmark like the repo rate, replacing MCLR for retail loans.

EMI (Equated Monthly Instalment)

The fixed monthly payment that repays a loan's principal and interest over its tenure.

Fixed Rate

An interest rate that stays constant for the loan's tenure or a defined initial period.

Floating Rate

An interest rate that moves with a benchmark, such as the RBI repo rate, over the loan's life.

FOIR (Fixed Obligations to Income Ratio)

The share of your monthly income that goes to EMIs and fixed commitments.

GST Returns (GSTR-3B)

Monthly or quarterly GST filings that lenders use to verify a business's turnover.

Guarantor

A person who promises to repay if the borrower defaults, without being a borrower.

Hard Enquiry

A lender's check of your credit report when you formally apply, which is recorded on the report.

Key Fact Statement (KFS)

A standard one-page disclosure of the loan's amount, APR, fees, EMI and terms, mandatory before signing.

Legal Verification (Title Search)

The lender's lawyer's check that the property has a clear, marketable title and valid approvals.

Lending Service Provider (LSP)

RBI's term for agents and platforms that perform lender functions such as sourcing, KYC or servicing on the lender's behalf.

Loan Eligibility

The maximum amount a lender will approve for you, based on income, obligations, credit and the asset.

Loan Fraud (Advance Fee Scam)

A scam where fake agents demand an upfront fee, insurance or deposit for a loan that never comes.

LTV (Loan to Value Ratio)

The loan amount as a percentage of the property's or asset's value.

MCLR (Marginal Cost of Funds Based Lending Rate)

The older internal benchmark used by banks for floating-rate loans before external benchmarks.

Moratorium

A period during which EMIs are not payable, common in education loans and under-construction home loans.

Own Contribution (Margin Money)

The part of the purchase price you pay from your own funds; the lender funds the rest.

Pre-EMI

Interest-only payments on the disbursed part of an under-construction home loan until full disbursal.

Prepayment or Foreclosure Charge

A fee some lenders levy when you repay a loan early, partly or fully.

Processing Fee

A one-time charge by the lender for evaluating and sanctioning the loan, usually a percentage of the amount.

Reducing Balance Interest

Interest charged only on the outstanding principal, which falls with each EMI.

Repo Rate

The rate at which the RBI lends to banks; the benchmark for most floating-rate home loans.

Sanction Letter

The lender's formal approval stating the loan amount, rate, tenure, conditions and validity.

Settled Account

A loan closed by paying less than the full amount owed, recorded negatively on your credit report.

Stamp Duty and Registration

State taxes paid on property transfer, typically 5% to 11% of value, not funded by lenders.

Surrogate Income Programme

A lender programme that assesses repayment capacity from bank statements, GST or rent instead of ITR profit.

Technical Valuation

The lender's independent assessment of a property's market value and construction quality.

Tenure

The length of the loan, in months or years, over which EMIs are paid.

Top-up Loan

Additional funds on an existing home loan or loan against property, usually at close to the original rate.

Udyam Registration

The government's free MSME registration, which unlocks priority sector lending and scheme benefits.