So you are all set to buy a home! Below are the six frequently used terms in a home loan process that you must get acquainted with:

1) EMI –

This is the monthly installment you pay to your lender towards the repayment of the home loan amount. The installment is deducted directly from the borrower’s bank account on a specific date of the month till the tenure of the loan.

2) EMI calculator -

An EMI calculator calculates the amount to be paid by the borrower as monthly installment towards repayment of the loan. The amount is calculated considering the amount of loan, the interest rate at which the loan is taken and the tenure of the loan.

3) Tenure –

This is the time within which the home loan must be repaid by the borrower to the lender. The tenure in home loans is long and most banks/NBFCs offer a tenure of upto 20 years to borrowers.

4) Interest rate -

It is the rate a bank or other lender charges to borrow its money through home loan. Most institutions now offer competitive interest rates for their home loan products.

5) Disbursal of loan -

Disbursal of a loan means the point at which the lender pays the amount of the loan over to the borrower. When a loan is disbursed to the borrower, it means that the borrower has received the amount of loan.

6) Foreclosure of loan -

Loan foreclosure is the full repayment of the remaining loan amount in one single payment instead of paying in EMIs.