Loan Terminology

Loan Terminology –
Loan Terminology –
Are you​ planning to​ take some loan in​ the​ near future? If yes,​ then the​ entire procedure will be fairly simpler if​ you​ are aware of​ the​ following Loan Terminology .​
We have picked up some most common terminologies,​ which you​ will come across various times while you,​ are applying for a​ loan.
 Principal – the​ money that you​ have borrowed.
 Interest – the​ money or​ in​ simpler words the​ rent that you​ need to​ pay for the​ money that you​ have borrowed.
 Borrower – the​ person (you) who receives the​ loan.
 Interest Rate - This is​ a​ percentage of​ the​ loan amount that you're being charged for borrowing money .​
It is​ a​ re-occurring charge that you​ need to​ repay,​ in​ addition to​ the​ principal .​
Interest rate is​ always recorded in​ the​ promissory note.
 Maximum repayment time - Your promissory note will state the​ maximum time that the​ you​ can take to​ repay the​ entire loan .​
Read the​ promissory note carefully .​
 Accumulated Interest – Unpaid,​ your past due interest.
 Adjustable Rate Mortgage (ARM) - a​ loan with an​ interest rate that changes over time in​ line with movements in​ the​ index.
 Adjustment Period -The time between interest rate changes on​ an​ ARM .​
a​ loan with an​ adjustment period of​ one year is​ called a​ one-year ARM,​ which explains that the​ interest rate can change once a​ year.
 Amortization - Repayment of​ a​ loan in​ equal installments of​ principal and interest,​ rather than interest-only payments.
 Co-Signer - a​ second party who takes responsibility for the​ debt by signing the​ contract.
 Lien the​ claim on​ a​ piece of​ property for payment to​ satisfy a​ debt or​ obligation.
These were some of​ the​ basic glossary that could help you​ .​
More lots more details on​ various types of​ business loans,​ check

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