Glossary
A table outlining loan payments, showing interest, principal, and remaining balance over the term of loan.
A summary document that shows the total interest paid or earned on a financial account over the course of a year, which is often issued by banks, lenders, or financial institutions and is used for tax filing.
A summary document provided by employers, financial institutions, or other organizations, detailing the income earned and taxes paid during a specific year, which is used for filing taxes.
The difference between the interest rate a lender charges on a loan and the cost of funds, indicating the lender’s profit margin.
A chronological record of all system activities and changes made during the loan lifecycle. It ensures accountability and compliance during audits.
A written agreement between a borrower and lender specifying repayment terms for a car loan, including interest and default clauses.
Loans borrowed by pledging borrower's vehicle, typically with fixed monthly payments.
The use of technology, algorithms and data to make decisions without human intervention.
A large final loan payment due at the end of a loan term after smaller periodic payments.
A loan tied to a benchmark interest rate set by financial institutions.
A summary of a borrower's financial background, including credit score, income, and debt-to-income ratio, used for loan evaluation.
A loan designed to fund business operations.
The method of determining the total cost of a loan, including interest and fees.
A charge off is when a lender deems a debt uncollectible and removes it from assets.
A loan status indicating it is unlikely to be repaid and has been written off or marked as NPA.
A financial metric that compares the total outstanding loans on a property to its appraised value. It helps lenders assess the risk of lending when multiple loans are secured against the same asset.
Loan management systems hosted on the cloud for scalability and accessibility.
A person who shares equal responsibility for repaying a loan and whose income and credit profile are considered during underwriting.
The interest applied on the principal and on the interest that was already applied.
A government agency created to protect consumers in the financial marketplace and ensure they are treated fairly by financial institutions.
A company that collects, stores, and manages credit information about individuals and businesses.
The connection between lending systems and credit bureaus to access borrower credit histories. It helps lenders assess creditworthiness in real time.
The maximum amount a borrower can draw from a credit account.
The likelihood of a borrower defaulting on a loan.
The process of arriving at a numerical value that reflects how likely the customer is to repay borrowed money based on their credit history.
The software tools / platforms used by businesses to manage their interactions with current and potential customers.
An online platform where borrowers can access loan details, make payments, upload documents, and manage their accounts without direct lender assistance.
A native or web-based mobile application designed to provide lenders and users with real-time KPIs.
The process of analyzing borrower data to optimize lending decisions.
A process of converting plain text or data into a coded format that can only be read or decoded with the correct decryption key. It is a fundamental security measure used to protect sensitive information.
The process of recovering long time unpaid loans from borrowers by lenders or agencies.
A company / an agency specializing in recovering long time past-due loans on behalf of lenders.
The process of combining multiple debts into a single loan or payment with the goal of simplifying your payments and potentially reducing interest rates.
A financial metric that compares a borrower’s available income to their total debt obligations, used to assess loan repayment ability.
A financial metric that compares the customers' monthly debt payments to their gross monthly income, which helps lenders assess their ability to manage payments and repay borrowed money.
The chance that a borrower will fail to make required loan payments. It directly affects interest rates and loan approval.
The state of missing loan payments beyond the due date..
The process of tracking and handling overdue loan payments to minimize defaults and recover outstanding debts.
A loan in which the borrower has failed to meet repayment obligations.
A secure electronic signature platform used to sign documents digitally. It ensures legal compliance and convenience for remote document approvals.
A software solution that helps organizations store, organize, track, and manage documents in a digital format making it easier to find, share, and secure important files.
The specific date by which a financial obligation must be paid. i.e. the next installment date
A fixed monthly payment made by the borrower that includes both principal and interest. It ensures full loan repayment over a specified term.
A U.S. law that prohibits lenders from discriminating based on race, gender, religion, or other protected traits. It ensures fair access to credit for all applicants.
A neutral third-party account used to hold funds until conditions of a contract are met. Common in real estate or loan disbursements for added security.
A feature that allows borrowers to electronically sign loan documents securely and legally. It streamlines the loan approval process by eliminating the need for physical paperwork.
The maximum amount a lender is willing to risk on a single borrower, sector, or loan type. It controls concentration risk and maintains portfolio health.
A set of laws, regulations, and policies designed to ensure that all individuals are treated fairly and equally, without any discrimination, when applying for loans or credit.
The estimated price an asset would sell for in an open and competitive market under normal conditions.
The legal process where a lender seizes collateral due to loan non-payment.
A set amount of time after a payment is due during which no late fees or penalties are charged, and the account is still considered in good standing.
A loan repaid in fixed monthly payments over a set period.
The cost of borrowing money, usually expressed as a percentage.
A formula used to calculate the amount of interest accumulating on a loan over time.
The cost of borrowing expressed in a percentage
The discount rate that makes the NPV of all cash flows from an investment equal to zero. It’s used to assess investment profitability.
A lender's decision to remove or not charge a penalty for a delayed loan payment under specific conditions.
A charge imposed for failing to make a loan payment on time.
A formal reminder that a loan payment is overdue..
A formal reminder that a loan payment is overdue..
A sum of money borrowed and repaid over time with interest.
The process by which a lender evaluates and agrees to lend money to a borrower based on their ability and likelihood to repay the loan.
A loan request form completed by the borrower, providing key personal, income, and employment information required by the lender.
The process of recovering overdue loan payments.
A permanent change in one or more terms of a loan agreement. Typically used to help borrowers facing long-term financial difficulty.
A formal document outlining the loan terms, including principal, interest rate, repayment schedule, and borrower obligations.
A one-time fee charged by lenders to cover the cost of processing a new loan application..
A collection of loans held by a financial institution.
The process of extending or re-establishing a loan agreement after the original loan term ends often with new terms.
A process where a lender changes the terms of a loan due to borrower hardship, often to avoid default. It may include extending tenure or lowering interest rates.
The conditions agreed upon by the lender and borrower, including payment schedule, interest rate, and loan duration.
The administration of a loan after disbursement, including payment collection, escrow management, and customer support. It ensures ongoing compliance and repayment tracking.
The process of paying off a loan either in full or through an agreement to reduce the outstanding balance.
A legal document that ranks one loan below another in priority for debt repayment, affecting which lender gets paid first in case of default.
A digital tool used by lenders to evaluate borrower risk, verify documents, and automate loan approval processes. It ensures consistent, data-driven underwriting decisions.
A measure used by lenders to compare the size of a loan to the value of the asset being purchased or used as collateral.
A tool used to monitor loan payments and outstanding balances.
A smartphone app that enables borrowers to apply for loans, track payments, and manage accounts on the go.
A feature in lending platforms that allows transactions and loan management in multiple currencies.
The value today of future cash flows from an investment, discounted back using a specified rate. A positive NPV indicates a profitable investment
A loan that has not received scheduled payments for an extended period, typically 90 days or more, and is considered at risk of default.
A credit facility where the borrower can withdraw funds up to a limit, but cannot reuse repaid amounts. Once repaid, the line closes unless re-approved.
Non Performing Asset, which refers to loan that is not getting repaid
The remaining balance of a loan that has not yet been paid. It is the total sum of money that a borrower still owes to the lender, including the principal, interest, and any additional fees or charges.
A system enabling secure online loan payments.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
The practice of analyzing and mitigating risks across a lender’s entire loan portfolio. It balances profitability with exposure to defaults.
The process of releasing the original loan amount (excluding interest) to the borrower. It marks the actual transfer of funds from lender to borrower.
A preliminary evaluation that determines if a borrower qualifies for a loan before final approval. It boosts borrower confidence and speeds up the loan process.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
An agreed-upon schedule for repaying a loan, outlining installment amounts, frequency, and duration.
A legal document in which a borrower formally promises to repay a specific loan amount under agreed-upon terms..
A system that provides instant access to up-to-date loan data, helping lenders track payments, delinquencies, and financial metrics in real time.
The process of replacing an existing loan with a new one, usually to get better terms like a lower interest rate, different loan length, or smaller monthly payments.
The process of submitting required financial data to regulatory authorities. It ensures compliance with industry laws and transparency.
A set of financial, behavioral, and credit-related factors used to evaluate borrower risk. It helps lenders decide loan terms or reject high-risk applications.
A lending strategy where interest rates are set according to the borrower's credit risk. Higher-risk borrowers pay more to compensate for potential losses.
Loans that have been modified in terms—like reduced interest, extended tenure, or revised payment schedules—to help borrowers manage repayment.
The estimated value of an asset at the end of its useful life or lease term. Commonly used in equipment financing and auto leases.
A preliminary step in the loan process that estimates how much a customer may qualify to borrow.
A security framework that restricts system access based on user roles, ensuring only authorized personnel can view or modify specific loan data.
A loan backed by collateral, such as a house or car.
The interest applied on the principal.
A basic legal document in which a borrower agrees to repay a loan under specified terms. It includes the loan amount, due date, and repayment conditions.
A loan repaid in one lump sum payment.
A loan designed to help pay for education-related expenses.
A borrower with a low credit score or high credit risk, often charged higher interest rates.
The ability to connect loan management software with external services like payment gateways, credit bureaus, and accounting tools for seamless operations.
A federal law designed to promote disclosure of accurate terms and conditions of credit and lending to protect consumers from unfair practices.
The process of assessing a borrower’s risk before approving a loan.
A fee charged by lenders to cover the cost of evaluating and processing a loan application. It may be a flat amount or a percentage of the loan.
A loan granted based on creditworthiness, without requiring collateral.
A loan agreement where repayment is based solely on the borrower’s promise, without requiring collateral.
A write off refers to a loan that is deemed uncollectible and removed from lender's active books
The use of technology to streamline lending processes.
The difference between the interest rate a lender charges on a loan and the cost of funds, indicating the lender’s profit margin.