Folio 09 · Glossary
Lending glossary. Plain English.
The words you’ll encounter on every home-loan and MSME file in India — explained with examples drawn from Money Matrix Hub’s own rate data.
APFApproved Project Finance
A bank's pre-cleared status on a developer's project — if your chosen flat is in an APF-listed project with that bank, sanction and disbursement are faster and the LTV is typically higher.
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APRAnnual Percentage Rate
The true annualised cost of a loan — interest rate plus processing fees, documentation charges, insurance, and mandatory costs amortised across the tenure.
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CIBIL ScoreCIBIL
A 300–900 number that summarises your credit behaviour — the single biggest lever that decides whether you get a loan, at what rate, and how fast.
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DLDDigital Lending Directions
The RBI's 2025 Digital Lending Directions — the single most comprehensive borrower-protection framework in Indian retail lending, covering KFS, DLG, recovery, cooling-off, and LSP-DSA conduct.
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DLGDefault Loss Guarantee
A regulatory term describing how much credit-loss a Lending Service Provider (LSP) can absorb on behalf of a regulated lender — RBI capped DLG at 5% in the 2022–2025 circulars to protect borrowers from mis-aligned incentives.
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FOIRFixed Obligation to Income Ratio
The percentage of your monthly net income that is already going to EMIs and recurring obligations — banks use this to decide how much more loan you can take.
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KFSKey Fact Statement
The RBI-mandated one-page (or short-form) summary every lender must give you BEFORE you accept a loan offer — it is the single most important document under Digital Lending Directions 2025.
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LTVLoan to Value
The percentage of the property's market value that a bank is willing to finance — the RBI caps LTV by ticket size to protect bank balance sheets and borrower equity.
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MSMEMicro, Small & Medium Enterprise
The statutory classification India uses for small businesses — your MSME status determines your eligibility for MUDRA, CGTMSE, interest subvention, and a raft of priority-sector credit flows.
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MUDRAMicro Units Development & Refinance Agency
The Government of India's flagship micro-credit scheme — MUDRA loans (Shishu, Kishore, Tarun) offer collateral-free credit up to ₹20 lakh for non-corporate non-farm small enterprises.
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PMAYPradhan Mantri Awas Yojana
The GOI's flagship housing subsidy — PMAY-Urban 2.0 and PMAY-Gramin together can deduct up to ₹1.80 lakh from your effective home-loan cost if you qualify as EWS, LIG, or MIG.
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Sanction Letter
The formal document a bank issues saying "yes, we will lend you this much, at this rate, on these terms" — it is the binding offer that precedes disbursement.
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