Understanding loan terms is essential for better loan management. In this video, we’ll walk you through some key terms related to loans. We’ll begin with the loan amount, which refers to the money you borrow from a lender. The loan tenure, on the other hand, is the period between loan disbursal and the final EMI payment. The interest rate is the percentage charged by your lender for borrowing the loan amount.
Collateral is an asset pledged for secured loans. In case of non-payment, this collateral may be seized by the lender. We’ll also cover co-borrowers and co-signers, both of whom share responsibility for the loan but in different ways.
You might also encounter terms like grace periods, processing fees, and pre-payment options, all of which could affect your loan. Loan amortisation refers to a repayment schedule, while loan deferment might help if you face financial difficulties.
Finally, we'll explain credit appraisal, hard and soft inquiries, and FOIR, which lenders use to assess your loan eligibility.
Familiarising yourself with these loan terms could provide clarity and make the borrowing process smoother.
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