Financial Glossary
Plain-English definitions of 34 common Indian personal-finance terms used across our calculators.
Amortization
The process of paying off a loan through regular installments, where each payment covers both interest and a portion of the principal, with the interest share shrinking and the principal share growing over time.
Try the EMI Calculator →APR (Annual Percentage Rate)
The yearly cost of borrowing, including interest and certain fees, expressed as a single percentage. It gives a fuller picture of a loan’s cost than the interest rate alone.
Basic Salary
The fixed core component of an employee’s salary, before allowances like HRA or bonuses. Many statutory calculations — PF, gratuity, HRA exemption — are based on Basic (+ DA), not gross salary.
Try the HRA Exemption Calculator →CAGR (Compound Annual Growth Rate)
The annualized growth rate of an investment over a period, smoothing out year-to-year volatility into a single constant rate that would produce the same final result.
Try the CAGR Calculator →CIBIL Score / Credit Score
A three-digit number (300-900) reflecting your credit repayment history, used by Indian lenders to assess loan and credit card eligibility. A score above 750 is generally considered good.
Compound Interest
Interest calculated on both the original principal and the interest already accumulated, causing balances to grow faster over time than with simple interest.
Try the Compound Interest Calculator →CTC (Cost to Company)
The total annual amount a company spends on an employee, including base salary, allowances, and employer contributions to PF/gratuity. CTC is always higher than actual take-home pay.
Try the Salary Calculator →DA (Dearness Allowance)
A cost-of-living allowance paid mainly to government employees and pensioners, adjusted periodically for inflation. It’s combined with Basic Salary for several statutory calculations.
DTI / FOIR (Debt-to-Income / Fixed Obligation to Income Ratio)
The percentage of your gross monthly income that goes toward existing debt payments. Indian lenders typically cap this at 40-55% when assessing new loan eligibility.
Try the DTI Calculator →EMI (Equated Monthly Installment)
The fixed monthly payment made to repay a loan, calculated so that a portion goes toward interest and a portion toward principal, fully repaying the loan by the end of its tenure.
Try the EMI Calculator →EPF (Employees’ Provident Fund)
A mandatory retirement savings scheme for salaried employees in India, where both employee and employer contribute a percentage of Basic + DA each month, earning government-notified interest.
FD (Fixed Deposit)
A lump-sum deposit with a bank for a fixed tenure at a fixed, guaranteed interest rate — one of India’s most common low-risk savings instruments.
Try the FD Calculator →Fixed vs Floating Interest Rate
A fixed rate stays the same for the loan’s tenure (or a set period); a floating rate moves with the lender’s benchmark rate (often linked to the RBI repo rate), so your EMI or tenure can change over time.
Foreclosure / Prepayment
Paying off a loan (fully or partially) before the end of its scheduled tenure. RBI rules prohibit banks from charging a prepayment penalty on floating-rate loans to individuals for non-business purposes.
Try the Prepayment Calculator →Gratuity
A lump-sum payment made by an employer to an employee as a token of appreciation for long service (minimum 5 years in most cases), calculated under the Payment of Gratuity Act, 1972.
Try the Gratuity Calculator →GST (Goods and Services Tax)
India’s unified indirect tax on the supply of goods and services, levied in slabs (commonly 5%, 12%, 18%, 28%) and split into CGST + SGST (within a state) or IGST (between states).
Try the GST Calculator →HRA (House Rent Allowance)
A salary component paid to employees to cover rental accommodation costs. A portion is tax-exempt under Section 10(13A), calculated using a specific three-way formula — but only under the Old Tax Regime.
Try the HRA Exemption Calculator →Inflation
The rate at which the general price level of goods and services rises over time, eroding purchasing power. It’s a key input for retirement and long-term financial planning.
Try the Retirement Corpus Calculator →ITR (Income Tax Return)
The annual form filed with the Income Tax Department declaring your income, deductions, and tax paid or due for a financial year.
Try the Income Tax Calculator →LTV (Loan-to-Value Ratio)
The percentage of an asset’s value that a lender is willing to finance. RBI caps LTV ratios for home loans, meaning a minimum down payment is typically mandatory regardless of your eligibility.
Try the Down Payment Calculator →Moratorium Period
A grace period during which a borrower isn’t required to make EMI payments — most commonly seen in education loans, covering the course duration plus a few months after graduation. Interest often still accrues during this period.
Try the Education Loan Calculator →Net Worth
The total value of everything you own (assets) minus everything you owe (liabilities) — the single most complete snapshot of your overall financial position.
Try the Net Worth Calculator →NPS (National Pension System)
A voluntary, market-linked retirement savings scheme regulated by PFRDA, offering additional tax deductions under Section 80CCD, with a mandatory partial annuitization of the corpus at retirement.
Try the NPS Calculator →Old vs New Tax Regime
Two parallel income tax structures in India: the Old Regime has higher slab rates but allows deductions (80C, HRA, etc.); the New Regime has lower slab rates but disallows most deductions. Taxpayers can choose either each year.
Try the Income Tax Calculator →PPF (Public Provident Fund)
A government-backed, long-term savings scheme with a 15-year lock-in, offering tax-free interest and Section 80C deductions — one of India’s few "EEE" (Exempt-Exempt-Exempt) tax instruments.
Try the PPF Calculator →Principal
The original sum of money borrowed (for a loan) or invested (for a deposit), before any interest is added.
Processing Fee
A one-time charge levied by a lender to process a loan application, typically 0.5-2% of the loan amount, separate from the interest rate.
RD (Recurring Deposit)
A bank savings product where you deposit a fixed amount every month for a chosen tenure, earning a fixed, guaranteed interest rate, compounded quarterly.
Try the RD Calculator →Repo Rate
The interest rate at which the Reserve Bank of India lends short-term funds to commercial banks. Changes in the repo rate influence floating home loan and deposit rates across the economy.
Section 80C
A section of the Income Tax Act allowing a deduction of up to ₹1,50,000 per year (Old Regime only) for investments and expenses like PPF, ELSS, life insurance premiums, and principal repayment on a home loan.
Try the Income Tax Calculator →SIP (Systematic Investment Plan)
A method of investing a fixed amount into a mutual fund at regular intervals (usually monthly), harnessing rupee-cost averaging and compounding for long-term wealth creation.
Try the SIP Calculator →Stamp Duty
A state government tax paid when registering a property purchase, calculated as a percentage of the property’s value (or government circle rate, if higher). Rates vary by state and sometimes by buyer gender.
Try the Stamp Duty Calculator →TDS (Tax Deducted at Source)
Tax deducted by the payer (an employer, bank, or client) at the time of making a payment, and deposited directly with the government on the recipient’s behalf, adjusted against the recipient’s final tax liability.
XIRR (Extended Internal Rate of Return)
A method for calculating the annualized return of an investment with multiple cash flows on different dates — such as a SIP — unlike CAGR, which only works for a single lump sum.
Try the SIP Calculator →