LoansFinancial Glossary
Margin (Loans)
Definition
The portion of the asset's cost that the borrower must fund from their own sources — essentially the gap between the asset value and the loan amount. In a home loan with 80% LTV, the margin is 20%. In a gold loan with 75% LTV, the margin is 25%.
Why It Matters
Margin requirements determine how much cash you need upfront. Many first-time home buyers focus on EMI affordability without realizing the margin (down payment) is the first hurdle. For a Rs 80 lakh flat, a 20% margin means Rs 16 lakh in cash before you even start paying EMIs.