Financial Education
Understanding financial terminology is the first step to making informed decisions. Explore our comprehensive glossary of essential terms.
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Loans
Principal
The original sum of money borrowed in a loan, excluding interest and fees.
EMI (Equated Monthly Installment)
A fixed payment amount made by a borrower to a lender at a specified date each month.
Interest Rate
The percentage of principal charged by the lender for the use of its money.
Collateral
An asset pledged by a borrower to secure a loan, which the lender can seize if the loan is not repaid.
Amortization
The process of spreading loan payments over time, with each payment covering both principal and interest.
Loan Tenure
The duration over which the loan is to be repaid, typically expressed in months or years.
Credit Cards
Credit Limit
The maximum amount of credit that a financial institution extends to a client.
APR (Annual Percentage Rate)
The annual rate charged for borrowing, expressed as a percentage of the principal.
Minimum Due
The smallest amount you must pay by the due date to keep your account in good standing.
Grace Period
The time between the end of a billing cycle and the payment due date when no interest accrues.
Cash Advance
A service allowing cardholders to withdraw cash using their credit card, usually with high fees.
Reward Points
Points earned on credit card purchases that can be redeemed for various benefits.
Banking
NEFT (National Electronic Funds Transfer)
An electronic fund transfer system maintained by RBI for transferring funds between banks.
RTGS (Real Time Gross Settlement)
A funds transfer system where money is transferred from one bank to another in real-time.
IMPS (Immediate Payment Service)
An instant interbank electronic fund transfer service available 24/7.
KYC (Know Your Customer)
The process of verifying the identity of clients to prevent fraud and money laundering.
Fixed Deposit (FD)
A financial instrument where money is deposited for a fixed period at a predetermined interest rate.
Savings Account
A deposit account that pays interest and allows easy access to funds.
Credit Score
CIBIL Score
A three-digit number ranging from 300-900 that represents your creditworthiness in India.
Credit Report
A detailed record of your credit history, including loans, credit cards, and payment behavior.
Credit Utilization Ratio
The percentage of available credit that you are currently using.
Hard Inquiry
A credit check that occurs when you apply for credit, which can temporarily lower your score.
Soft Inquiry
A credit check that does not affect your credit score, such as checking your own credit.
Default
Failure to repay a loan according to the agreed terms, negatively impacting credit score.
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Our glossary is continuously updated with new terms. Check back regularly for more financial education resources.