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Borrower Classification
Lenders classify borrower based on their personal and professional profile. Most common borrower classifications are:

• Salaried Individuals

• Self Employed professionals

• Self Employed Individuals

Breach
A violation of any legal obligation.

Check-off Facility
This is a facility by which the employer of the borrower agrees to deduct the installment amount from his salary and pay the same directly of the lender. In some cases the lender imposes special lien on payment of borrower's provident fund. This facility offer's a kind of security of the lender towards repayment of loan.

Co-applicant
A person who applies to the lender along with the applicant to avail a personal loan. The income of the co-applicant is clubbed with that of the applicant to arrive at the maximum loan amount. Some lenders insist on a co-applicant when the amount of loan sought is more than certain pre-specified limit.

Collateral
Assets that can be used to back up a loan which you obtain with a finance company. If you fail to pay the loan as agreed, the finance company can take these assets.

Collection
The process of forcing a borrower to pay what he owes on a loan and, if it comes to that, to proceed with foreclosure.

Compound Interest
The interest calculated on the principal balance as well as the accumulated interest is called compound interest. It is usually higher than the simple interest.

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