It is a contract which allows use of an asset in consideration of payment (rent).
To pay off a debt with regular payments.
When a loan is repaid before the borrowed period, certain charged are applied on the borrower.
A partial payment made at the time of purchase, with the balance to be paid later
The date on which the principal balance of a loan, bond or other financial instrument becomes due and payable.
When a loan get approved, a written agreement is to be signed between the lender and the borrower which sets out all the rules and regulations between both parties.
A person or a thing which is used as a guarantee
Interest is calculated on a reducing balance. That means that the principal is reduced every year/month and interest is calculated on the outstanding balance at the end of the year/month
Also called as fixed interest rate. This is a very simple method and hence is preferred by many. The percentage of the rate is calculated on the principal amount of the loan, and this is done for the entire time period for which the loan is taken. The interest figure along with the capital is then distributed over the entire repayment period to arrive at the amount of equated monthly installment (EMI). Though this method is very simple, its major drawback is that the impact of the repayment of the capital is not considered at all in the entire interest working.
Describes the maximum amount that a borrower can borrow from a financial institution for a specific program, i.e. Personal Finance or Vehicle Finance and so on.
Arrangement fee is the cost of setting up a loan which is payable in advance.