Loan Glossary India

CIBIL Score

A 3-digit credit score (300–900) that summarises your credit history for lenders.

Co-applicant

A person who applies for a loan jointly with the primary borrower.

Collateral

An asset pledged by the borrower as security against the loan.

DPD

Days Past Due — the number of days a loan payment is overdue.

EMI

Equated Monthly Instalment — the fixed monthly payment made to repay a loan.

Foreclosure

Repaying the entire outstanding loan balance before the end of the tenure.

Guarantor

A person who promises to repay the loan if the primary borrower defaults.

Interest Rate

The percentage charged by a lender on the borrowed amount, expressed per annum.

LTV Ratio

Loan-to-Value ratio — the percentage of the property value that a lender will finance.

Moratorium

A temporary pause in loan EMI payments, during which interest continues to accrue.

NACH Mandate

National Automated Clearing House — a system that auto-debits your EMI from your bank account.

NOC

No Objection Certificate — a document confirming no outstanding disputes on a property or loan.

Principal

The original amount borrowed in a loan, excluding interest.

Processing Fee

An upfront fee charged by lenders to cover loan application and administrative costs.

Tenure

The duration of the loan — the agreed period within which the borrower must repay.