You may be wondering what is a late fee if you have signed up for credit solutions or financial products. The late fee meaning is simple. It refers to a penalty or extra charge associated with late payment of your financial obligations. These may include EMIs for a loan, credit card bills, premiums for insurance …
Post Type Archives: Glossary
Leverage
Leverage or, in this case, financial leverage, meaning an investment strategy where you take on debt to increase investment returns, raise funds for the company or acquire more assets is now becoming more popular. Businesses or individuals can borrow money from lenders for the above purposes, with a commitment to repaying the borrowed amount along …
Liabilities
Liabilities refer to the debts which may include unpaid credit card bills, loans, or mortgages. Having a liability is having legal responsibility to pay your dues. In books of accounts, liabilities are depicted on the right and assets on the left. They refer to all things that you have borrowed and thus owe. For instance, …
Liability
Liability refers to the legal obligation of an individual or a business to repay debts or fulfil other financial responsibilities. It can include loans, accounts payable and other financial obligations. Liabilities are recorded on a company’s balance sheet and are used to assess its financial health.
Line of Credit
A line of credit is a type of loan that allows a borrower to access a certain amount of funds from a lender, up to a pre-approved limit. The borrower can borrow and repay funds as needed and interest is typically only charged on the actually utilised. For instance, say you get a line of …
Liquidation
Liquidation means the sale of assets of a company to raise capital and pay off debt, such as to shareholders or creditors. Liquidation may be voluntary when a company is shutting its business, or compulsory when it is forced to shut down its business due to insolvency.
Liquidity
Liquidity refers to the ability of an asset or investment to be easily converted into cash or be used to make payments. High liquidity means that an asset can be quickly bought or sold without significantly affecting its price. Liquid assets usually come with a short maturity tenure and a low risk profile and include: …
Loan Agreement
Wondering what is a loan agreement? This document is a crucial contract that defines the financial terms and conditions between a borrower and a lender. A loan agreement contains important information relating to the: Loan amount Repayment tenure Interest rates and other charges applicable such as late fees, processing fees and more Repayment schedule and …
Loan Amortisation
Wondering what is loan amortisation? It refers to a repayment schedule where you, as a borrower, make regular payments towards your loan, covering both a portion of the accrued interest and the principal amount you owe. In an amortised loan, a larger part of your repayment instalment goes towards interest payment and a smaller portion …
Loan Rate
The loan rate is nothing but the rate of interest. It is also called the lending rate. The loan rate applies to a loan during repayment, where you as the borrower not only repay the principal or loan amount you have borrowed, but also the interest due to the lender. The loan rate is thus …