The KFS is the first right on our borrower rights checklist for India, and the one that protects you most, because it lands in your hands while you can still walk away. Yet most borrowers scroll past it to the “Accept” button. This guide walks through a KFS line by line, shows how a lower interest rate can still be the costlier loan, and gives you a 10-point check to run before you sign.
What is a Key Fact Statement?
A KFS is a standardised summary of a loan’s cost and terms. The RBI made it mandatory for all retail and MSME term loans sanctioned on or after 1 October 2024, by every regulated lender: banks, NBFCs and others (RBI circular of 15 April 2024). For loans taken through an app or website, the RBI’s Digital Lending Directions, 2025 also require the KFS to be shown before the loan contract is executed.
The rules behind it are simple and borrower-friendly:
- Standard format. Every lender uses the same layout, so you can put two offers side by side.
- Your language. The KFS must be in a language you understand, and the lender must explain it and take your acknowledgement that you have understood it.
- Time to think. For loans of seven days or more, the KFS must stay valid for at least three working days (one working day for shorter loans). The lender cannot rush you into signing the same hour.
- APR with a computation sheet. The KFS includes a sheet showing how the APR was calculated, plus a repayment (amortisation) schedule.
- No surprise charges. A fee that isn’t disclosed in the KFS cannot be charged at any stage of the loan without your explicit consent.
- Part of your contract. The KFS is repeated as a summary box in the loan agreement.
Reading a KFS, line by line
Here is what each part of a typical personal-loan KFS tells you, and the question to ask about it.
| KFS line | What it means | What to check |
|---|---|---|
| Loan amount (sanctioned) | The principal the lender is lending you | Matches what you applied for |
| Interest rate and type | Yearly rate, and whether it is fixed or floating | Is it on a reducing balance? A flat rate costs far more than it looks |
| Fees and charges | Processing fee, insurance, documentation and any third-party charges, with GST | Every rupee deducted upfront is listed separately |
| Net disbursed amount | What will actually reach your bank account | Is it enough for your need after fees? |
| Total amount to be paid | Principal plus all interest over the full tenure | Can your budget carry it, month after month? |
| APR | The all-in yearly cost, including fees | The number to compare across lenders |
| EMI and schedule | Number of instalments, amount and dates | The date sits soon after your salary credit |
| Penal and contingent charges | Charges for late payment, bounced mandates and similar events | Charged as a fixed fee, not added to the interest rate |
| Prepayment / foreclosure | Whether closing early costs anything | See our prepayment and foreclosure rights guide |
| Cooling-off period | Days during which you can exit by repaying principal and proportionate APR | The exact number of days and the exit cost |
| Recovery and grievance | Clause on recovery agents, grievance officer’s name and contact | A real name, email and phone number |
Layouts vary slightly by lender; the elements above are those the RBI’s standard KFS format asks for.
Interest rate vs APR: why the headline number misleads
The interest rate tells you what you pay on the money you owe. The APR adds in the fees, and it works on the money you actually receive. Because fees are usually deducted before the loan reaches you, the APR is almost always higher than the interest rate. The gap is what lenders with “low rates” and high fees hope you won’t notice.
Take two illustrative offers for the same ₹2,00,000 loan over 24 months, both on reducing balance:
Offer A: 13% a year, 6% fee
Fee plus 18% GST: ₹14,160, so ₹1,85,840 reaches you. EMI ₹9,508. Total repaid ₹2,28,201. APR about 20.6%.
Offer B: 15% a year, 2% fee
Fee plus GST: ₹4,720, so ₹1,95,280 reaches you. EMI ₹9,697. Total repaid ₹2,32,736. APR about 17.5%.
Headline rate vs APR for the two illustrative offers
Illustrative offers, not quotes from any lender. ₹2,00,000 for 24 months, reducing-balance EMI, processing fee plus 18% GST deducted from the disbursal. APR is our calculation of the yearly internal rate of return on the net amount received.
Offer A looks two points cheaper on the ad. On the KFS, it is about three points dearer, and you also receive ₹9,440 less in hand. That is the whole reason the KFS exists.
Penal charges: the line that bites later
Since the RBI’s fair-lending rules on penal charges took effect in 2024, lenders may not add “penal interest” on top of your interest rate when you pay late. They may levy a penal charge, which must be reasonable, must not be compounded, and must be disclosed in the KFS and loan agreement. So check two things: what one late EMI will cost you, and what a bounced e-mandate costs on top (your bank may charge separately for a failed e-NACH debit). If a lender later asks for a late fee that is bigger than, or different from, the KFS figure, ask in writing which clause allows it.
If it isn’t in the KFS, it isn’t in your loan.
A 10-point check before you sign
Get the KFS before the money
No KFS before sanction is a red flag on its own. Genuine regulated lenders, including app-based ones, show it before you accept.
Check the lender’s name
The KFS must name the bank or NBFC that lends. If you are on an app, confirm the lender in the RBI’s directory of digital lending apps.
Compare APR, not the rate
Line up every offer’s APR. A difference of even two points matters over two or three years.
Subtract the fees yourself
Net disbursed = loan amount minus every upfront deduction. Make sure it covers your need.
Add up the total payable
EMI × number of EMIs. Is that a number you are comfortable with?
Check insurance and add-ons
Any insurance bundled into the loan must be shown as a separate charge. Ask whether it is optional.
Read the penal charges
Note the exact cost of one late EMI and one bounced mandate.
Find the prepayment line
Know what closing early would cost before you need to.
Note the cooling-off period
Write down how many days you have to exit and what you’d pay. Our cooling-off period guide explains how it works.
Save a copy
Download or screenshot the KFS and keep the email or SMS that delivers it with your sanction letter. It is your evidence if anything changes later.
If a lender charges something not in your KFS
Write to the lender’s grievance officer, whose name and contact appear in the KFS, quoting your loan number and the KFS line. Ask for the charge to be reversed. If you get no reply within 30 days, or the reply doesn’t resolve it, you can escalate to the RBI. Our guide on how to complain about a lender walks through each step.
How Omozing shows you the cost
Omozing personal loans for salaried people start from 11% a year, with a processing fee of 3%–7% plus GST. Your exact rate, every fee and the APR are set out in your Key Fact Statement before you sign, and there are no upfront fees before approval. A credit officer reads your full credit report rather than rejecting on a single cut-off, which is why we can consider scores from 600. Read our page on personal loans with a CIBIL score from 600 if your score is in the 600s.
See your full cost before you commit
Apply for an Omozing personal loan with two documents: your latest salary slip and six months of salary-account bank statements. You’ll see the rate, every fee and the APR in your KFS before you sign.
Frequently asked questions
What is a Key Fact Statement in a loan?
It is a standardised summary that RBI-regulated lenders must give before you sign a retail or MSME term loan. It shows the loan amount, interest rate, every fee, the amount you will actually receive, the total you will repay, the repayment schedule, penal charges and the APR.
Is a KFS mandatory for personal loans?
Yes. The RBI made a KFS mandatory for all retail and MSME term loans sanctioned on or after 1 October 2024, including personal loans from banks, NBFCs and loans taken through apps.
What is the difference between interest rate and APR?
The interest rate is charged on the outstanding loan. The APR is the all-in yearly cost, including processing and other fees, worked out on the amount you actually receive. When fees are deducted upfront, the APR is higher than the interest rate, so compare loans on APR.
How long is a KFS valid?
For loans with a tenor of seven days or more, the KFS must be valid for at least three working days; for shorter loans, at least one working day. This gives you time to read it and compare offers.
Can a lender charge a fee that is not in the KFS?
No. Under the RBI’s rules, a charge not mentioned in the KFS cannot be levied at any stage of the loan without your explicit consent. If it happens, complain in writing to the lender’s grievance officer and escalate to the RBI if it isn’t resolved within 30 days.
Where do I find the KFS for an Omozing loan?
You receive it before you sign, with your exact rate, fees, APR and repayment schedule. Keep a copy along with your sanction letter and loan agreement.
Sources: RBI circular “Key Facts Statement (KFS) for Loans and Advances”, 15 April 2024 (applies to loans sanctioned from 1 October 2024); RBI (Digital Lending) Directions, 2025, issued 8 May 2025; RBI circular on penal charges in loan accounts, 18 August 2023. Rules as of October 2026; check rbi.org.in before acting. This is general information, not legal advice.
Omozing is the digital lending brand of Aparampaar Finance Private Limited, an RBI-registered non-deposit-taking NBFC. See our regulatory disclosures and grievance redressal process.