Terms Related to Loans

Borrowing power
The amount an individual or organization can borrow, usually calculated using income/revenue, expenses and other

debt obligations .
Capital

The net worth of an individual or organization, or the value of an asset after deducting costs .
Capital gain
The growth in value of an asset after deducting the cost of the purchase

Collateral security
An asset which a borrower uses to secure funding from a lender. In the event that the borrower
cannot repay their debt, this asset can be acquired by the lender.

Compound interest
Interest calculated on the total amount of funds including the principal and any previously
accumulated interest. Compare with simple interest, which is calculated only on the principal
amount.
 Credit
• In relation to a loan or credit card this is the amount available to spend, based on an ability to pay
• In relation to an account, credit is an amount received into an account.
Credit report
• A report on an individual or organization identifying:
• defaults
• judgments
• bankruptcies
• directorships
• prompt payment of obligations

Credit assessment
• ability to repay a borrowed amount, usually based on their credit history along with their income and expenses.
Credit limit
• The approved amount of funds available to a borrower to use according to the agreed purpose.
Credit score
• A credit score is a numeric expression that indicates how credit worthy someone is. The score is created using an analysis of a
person's credit history as provided by past creditors. The score is held by a credit bureau.
Depreciation
• The loss in value of an asset over time.
Gross income
• Total amount of money received prior to relevant deductions, such as taxes and levies.
Mortgage
• An agreement between a lender and a borrower who is a property owner where the property is used as collateral or security for
an amount borrowed to purchase it

Net income
• Total amount of money received after relevant deductions, such as taxes and levies
•
• Hypothecation means offering an asset as a collateral security to the lender whereby the ownership lies with a
lender and the possession is enjoyed by the borrower. ... It is usually done in a case of movable assets

• What is Cibil score (main bta dunga)

• Due
• Over Due

• Q -What is the minimum cibil score to get the loan ?

• ANS The minimum CIBIL score for a personal loan is generally 750. Anything above this would mean that the
applicant is creditworthy and applications are processed without hassle. In general credit scores range from 300
to 900; 300 being on the lower end of the range and 900 on the higher end
• (what are the base to calculate cibil score find it khud se)

• Bankruptcy is a legal status of a person or other entity who cannot repay debts to creditors. In most
jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.

• Question -in how many months an individual declare bankrupt ???????

• Ans - the process usually takes six months . Before, and during that time, you and possibly your friends or
workplace, have received phone calls from debt collection agencies trying to settle your accounts. Those calls
must stop as soon as you declare bankruptcy

•
Question – what are the basic document required for taking loan ?
Ans - Valid Proof of Applicant's Identity (any one of the following): Voter ID Card/Passport/PAN Card/Driving License
• Proof of Residence (any one of the following): Ration Card/Passport/Utility Bill
• Proof of Age (any one of the following): Voter ID Card/Passport/PAN Card/Driving License
• Income Proof: Latest 3 month's Salary Slips and Form 16.
• Job Continuity Proof: Current Employment Certificate or Current Job Appointment letter and Experience Certificate
• Bank Statement: Latest 6 month's statement from bank
• 1 Passport size color Photograph
• Last 3 years income tax return