Indian Personal Finance Glossary
Every concept used across BachatCalculator's calculators — defined with worked examples, formulas where applicable, and primary-source citations.
All entries, A–Z
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Credit Score
A 300–900 numeric rating of an individual's creditworthiness, issued by RBI-licensed Credit Information Companies and used by banks to price retail loans.
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EMI
A fixed monthly payment a borrower makes to a lender, comprising principal repayment and interest.
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Floating Rate
A loan whose interest rate changes periodically, linked to an external benchmark such as the repo rate.
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FOIR
The percentage of your monthly income that goes toward all fixed debt obligations; the primary loan-eligibility metric used by Indian banks.
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LTV
The portion of an asset's value that a lender will finance; capped by RBI for home loans, gold loans, and loans against property.
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MCLR
The internal benchmark interest rate set by Indian banks below which they cannot lend, replacing the older base-rate system.
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On-Road Price
The total price a buyer pays to take a vehicle home; ex-showroom + RTO charges + insurance + extended warranty + accessories.
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Prepayment Penalty
A fee for paying off a loan ahead of schedule; banned by RBI on floating-rate retail home loans for individual borrowers.
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Processing Fee
A one-time fee charged by a lender at the time of loan sanction; typically 0.25%–2.5% of the loan amount in India.
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Reducing Balance Method
An interest-calculation method where each month's interest is computed on the outstanding principal balance.
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Repo Rate
The interest rate at which the Reserve Bank of India lends short-term funds to commercial banks; the primary monetary-policy lever.
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