CIBIL Score
A three-digit credit score (300-900) maintained by Credit Information Bureau (India) Limited that represents your creditworthiness and borrowing history.
Example: A CIBIL score of 750+ is considered excellent and increases your chances of loan approval.
Related: Credit Score, Credit History, Creditworthiness
EMI
Equated Monthly Installment - a fixed amount you pay each month to repay a loan over a specified period.
Example: A ₹10 lakh home loan at 8% for 20 years has an EMI of approximately ₹9,363.
Related: Loan, Interest Rate, Tenure
Credit Card
A financial instrument issued by banks that allows you to borrow money up to a credit limit and repay it later, typically monthly.
Example: Using a credit card for groceries gives you rewards and a month to pay without interest.
Related: Debit Card, Credit Limit, Interest Rate
Interest Rate
The percentage of principal charged as interest per annum on a loan or credit borrowed.
Example: A personal loan at 12% interest means you pay ₹12 annually for every ₹100 borrowed.
Related: APR, EMI, Principal
Debit Card
A payment card linked to your bank account that deducts money directly from your account when used.
Example: Paying ₹500 with a debit card immediately reduces your account balance by ₹500.
Related: Bank Account, Credit Card, UPI
Principal
The original amount of money borrowed or invested, excluding interest and charges.
Example: If you borrow ₹1 lakh, the principal is ₹1 lakh before any interest is added.
Related: Loan, Interest, EMI
Tenure
The period over which you must repay a loan, typically expressed in months or years.
Example: A home loan with a 20-year tenure means you have 240 months to repay the borrowed amount.
Related: Loan, EMI, Interest Rate
Credit Limit
The maximum amount of credit a bank allows you to borrow using a credit card.
Example: A credit card with a ₹5 lakh limit means you can make purchases up to ₹5 lakh each month.
Related: Credit Card, Credit Utilization, Balance
Credit Utilization
The percentage of your available credit limit that you're currently using.
Example: Using ₹20,000 of your ₹1 lakh credit limit means 20% credit utilization.
Related: Credit Limit, CIBIL Score, Credit Card
APR
Annual Percentage Rate - the total annual cost of borrowing including interest and other fees.
Example: A personal loan with 12% APR costs ₹12,000 annually for every ₹100,000 borrowed.
Related: Interest Rate, Fees, Loan Cost
Personal Loan
An unsecured loan provided by banks or NBFCs that can be used for any personal purpose without collateral.
Example: A ₹5 lakh personal loan can be used for home renovation, wedding, education, or debt consolidation.
Related: Loan, Unsecured, EMI
Home Loan
A secured loan provided for purchasing or renovating a property, with the property serving as collateral.
Example: A home loan lets you purchase a ₹50 lakh property with 20% down payment and financing the rest.
Related: Secured Loan, Property, Mortgage
Auto Loan
A secured loan specifically designed for purchasing vehicles, with the car/bike serving as collateral.
Example: An auto loan for a ₹10 lakh car might require 10-20% down payment with financing for the rest.
Related: Vehicle, Secured Loan, Collateral
Education Loan
A loan designed to finance higher education (domestic or international) with special repayment terms.
Example: An education loan covers tuition, accommodation, and other education expenses with a moratorium period.
Related: Student, Moratorium, Repayment
Collateral
An asset pledged as security for a loan. If you default, the lender can seize the collateral.
Example: A home serves as collateral for a home loan, meaning the bank can foreclose if you don't pay.
Related: Secured Loan, Default, Mortgage
Default
Failure to repay a loan or credit obligation on the due date, which negatively impacts credit score.
Example: Missing 3+ consecutive EMI payments is considered a default and reported to CIBIL.
Related: Late Payment, Delinquency, CIBIL Score
Balance Transfer
Moving your credit card debt from one card to another, often at a lower interest rate.
Example: Transferring ₹1 lakh credit card debt at 3% interest instead of 36% saves ₹3,300 annually.
Related: Credit Card, Interest Rate, Debt
Rewards Points
Benefits earned on credit card purchases that can be redeemed for discounts, cashback, or gifts.
Example: Earning 1% cashback means ₹100 spent gives ₹1 back as cashback or points.
Related: Credit Card, Cashback, Redemption
Cashback
Direct money returned to you as a percentage of your spending on a credit card.
Example: 5% cashback on groceries means ₹5 back for every ₹100 spent at grocery stores.
Related: Rewards, Credit Card, Benefits
Annual Fee
A yearly charge levied by credit card issuers for holding the card, sometimes waived with spending.
Example: A premium credit card might have ₹500 annual fee but waived if you spend ₹1 lakh in a year.
Related: Credit Card, Fee, Charges