Financial Dictionary
Clear, accurate definitions for essential banking, lending, and investment terms to help you make smarter financial decisions.
A
Amortization
The process of paying off a debt with fixed repayment schedules in regular installments over time. An amortization schedule shows how much goes to interest vs. principal.
View Home Loan ScheduleAnnual Percentage Rate (APR)
The broader measure of the cost of borrowing. It reflects not only the interest rate but also the fees that you have to pay to get the loan.
Calculate Personal Loan APRC
Compound Interest
Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods. The driving force behind wealth creation.
Open SIP ProjectorCIBIL Score
A 3-digit numeric summary of your credit history, rating, and report, ranging from 300 to 900. A higher score secures better loan interest rates.
Check Loan EligibilityD
Down Payment
An initial upfront partial payment for the purchase of an expensive item, such as a car or a house. It dictates the remaining loan principal.
Test Down Payment ImpactE
Equated Monthly Installment (EMI)
A fixed payment amount made by a borrower to a lender at a specified date each calendar month, used to pay off both interest and principal each month.
Calculate EMI NowExpense Ratio
The annual maintenance charge levied by mutual funds to finance its expenses. It reduces the net returns generated by a SIP.
Factor ReturnsF
Floating Interest Rate
An interest rate that moves up and down with the rest of the market or along with an index (like the RBI Repo Rate). Common in Indian Home Loans.
Model Rate ChangesM
Moratorium Period
A time during the loan term when the borrower is not required to make any repayment. Often applied to Education Loans during the study period.
Calculate MoratoriumMutual Fund
A financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments.
Simulate MF ReturnsP
Pre-Payment (Part-Payment)
Paying off a portion of your loan principal before it is due. This significantly reduces the overall interest burden and shortens the loan tenure.
Check Pre-payment ROIR
Reducing Balance
A method of calculating interest where the interest is charged only on the outstanding principal balance of the loan, resulting in decreasing interest components over time.
Test FormulaRepo Rate
The rate at which the Reserve Bank of India (RBI) lends money to commercial banks. Changes in this rate directly impact your Home and Car Loan EMIs.
Adjust Base RateS
Systematic Investment Plan (SIP)
An investment vehicle that allows investors to invest small amounts periodically (usually monthly) instead of lump sums. It relies heavily on rupee cost averaging.
Calculate SIPStep-Up SIP
A strategy where you automatically increase your monthly SIP contribution by a fixed percentage every year, usually matching your annual salary hike.
Project Step-Up