Every time you read about personal loans, there are recurring terms that you will come across. Some may be familiar with all the terms, whereas, for those looking for a personal loan for the first time, these words may be completely new.
If you are applying for an instant loan, there is no reason for you to be confused. Here’s an important personal loans glossary that will aide you significantly:
Borrower: A borrower is an individual who needs the funds and avails it from a financial institution in the form of a loan.
Lender: A lender is an institution that provides or gives the funds to the borrower.
The amount of funds you borrow is known as the principal amount. It does not include any interest or fees.
When funds are borrowed, an interest rate is charged, in percentage, by the lender on the principal amount that is availed by the borrower. When this percentage remains unchanged throughout the tenure of the loan, it is known as a fixed interest rate.
When you take a loan, there are certain terms and conditions involved. This is known as loan terms. It may include the tenure of the loan, interest rate, any processing fee, pre-payment charges, etc.
Every loan has a pre-decided tenure. When you decide to close a loan before the completion of the tenure, in full or partially, it is known as loan foreclosure.
When you foreclose a loan, partially or in full, it may attract a certain amount of charges or fees. This fee is known as a pre-payment penalty.
A report that is generated by a certified credit agency that details an individual’s creditworthiness is known as a credit report.
A three-digit number that is computed and assigned to the individual based on his credit history is known as a credit score. It defines the creditworthiness of the person and can be found in a credit report. Credit scores are also popularly known as CIBIL score, as the credit ranking agency, CIBIL is known to be one of the foremost rating agencies in India. 750 and above is considered to be a good CIBIL score. However, you can avail a personal loan for a low CIBIL score through Finnable.
The record of all your transactions including your income and expenditure, borrowing, and spending is known as credit history.
The interest rate applicable on a personal loan is known as the personal loan interest rate. This differs from lender to lender. For instance, the personal loan interest rate at Finnable starts at 16% up to 26%.
A loan tenure is defined as the duration through which a loan is repaid. As a borrower, you can choose to have a short-term loan tenure or a long-term tenure. The personal loan tenure at Finnable starts at 6 months and can be up to 5 years.
Loans that availed without collateral or pledging an asset against the principal amount are known as unsecured personal loans. They are also known as collateral-free loans. These loans can be availed to pay for any personal expense. Banks as well as Non-Banking Financial Companies (NBFC) are known to disburse quick and easy unsecured loans.
Equated Monthly Installment (EMI) is a fixed amount you repay the lender on a specific date, every month until the completion of the loan tenure. It is a cumulative amount that comprises the principal and the rate of interest that is applicable.
A borrowing facility that is given to you, by your lender, where you can borrow additional funds over and above your existing personal loan is known as a top-up loan. A top-up loan is not a new loan.
A personal loan glossary comes in handy if you are planning to take a personal loan. Before you take a loan, you should know that there are various types of personal loans disbursed by NBFCs.
Finnable disburses education loan, travel loan, wedding loan, home renovation loans, medical loans, etc. The minimum amount you can avail of is Rs. 50,000 and the maximum loan amount can be up to Rs. 10 lakhs.
Being collateral-free loans, the interest rate starts at 16% and your maximum loan tenure can be for 5 years. Taking an instant loan through Finnable is easy and can be done through their personal loan app. All you will need is your KYC details and income proof.
The entire process can be completed in 3 simple steps and the funds are credited within a few hours of document verification.
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Finnable is one of the fastest growing financial technology (Fintech) start-up with an NBFC license from RBI providing hassle free loans. Our mission is to make Personal loans available in less than 24 hours
Example of Personal Loan for Salaried Professionals✓ Loan Amount from ₹50,000 to ₹10,00,000✓ Repayment period (loan tenor) options vary from 6 to 60 months ✓ Annual Interest Rate (APR) is 16% to 26% (on a reducing balance basis) + processing fees of 3 to 4% on the principal loan amount ✓ For Example – a loan of ₹1,00,000 with an APR of 16% (on a reducing balance basis), repayment tenure of 12 months, processing fee of 3%. The processing fee will be ₹3,000 + ₹540 GST with monthly EMI will be ₹9,394. The total loan amount will be ₹1,03,540. Total interest payable over 12 months will be ₹9,191. Total loan repayment amount is ₹103540 + ₹9191 = ₹1,12,731 *These numbers are for representation only and the final interest rate or processing fee may vary from one borrower to another depending on his/her credit assessment.✓ Loan Prepayment Charges: 3 to 6% charge + 18% GST on the remaining principal amount (allowed after 6 EMI payments)Why is Finnable the best personal loan app?Instant Loans within 48 hours: Gone are the days when you had to wait weeks & months to get a loan approved.Completely Digital/Paperless: Finnable instant loan app offers a complete digital service to help save time as well as paper!
Contact Us: Drop us an email: firstname.lastname@example.orgAddress: IndiQube Lakeside, 4th Floor Municipal No. 80/2 Wing A, Bellandur Village Varthur, Hobli, Bengaluru, Karnataka 560103Responsible LendingFinnable has partnered with RBI authorised & regulated NBFCs/Financial Institutions.Our policies and services are fully regulated and legally compliant.
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