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Loan Glossary
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Confused in the Home Loan jargon? Our glossary
will help you in understanding the basic loan related terms.
Browse through the glossary or serach for a term through the
menu to resolve any doubts.
Glossary of Home Loan terms
P
Penal interest
Penal interest is the interest charged from the borrower on
the installments delayed; if the installments are not received
as per the repayment terms, by the end of the month.
Plinth area
Area measured externally of the whole building. This includes
balconies; however this will not include common areas in
apartment blocks/commercial buildings and spaces.
Power of attorney
It is an instrument of law empowering a specified person
or persons to act for and in the name of the person executing
it. The person for whom the act is done or who is so represented
is called principal. The person who is so authorized to
do or represent is called agent. It may be either notarized
or registered depending on the transaction.
Pre-EMI
The EMI for the loan will begin after the loan has been
disbursed in full. Till such time the borrower has to pay
the interest for the loan. This amount of interest payable
every month is called as pre-EMI.
Prepayment
It is the amount paid towards principal ahead of the prescribed
repayment schedule. The benefit of interest is given to
the party in such cases as per the norms of the home loan
provider. Most HFCs charge some fee for pre-payment of loan
before the tenure is over. The fee is normally in the range
of 1-2% of the pre-paid amount.
Pre-sanction inspection of property
This is the inspection done immediately on receipt of the
application of the loan application. A loan officer from
the HFC will conduct an inspection of the property to ascertain
the location of the property, verify the technical details
of the house like structural stability etc and the stage
of construction, if the loan is for construction.
Principal
The amount of money that has been borrowed. Interest is
generally payable on the Principal outstanding from time
to time.
Property tax
This is the tax levied on the property by the local authority
such as Corporation, Municipality, etc to the person in
whose name the property stands.
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