By BillCut
Last updated: 2 November 2026<\/p>\n
What to check before taking your first loan comes down to six things: the Key Facts Statement, the total cost, whether the EMI fits your pay, the repayment terms, whether the lender is regulated by the RBI, and how the loan will show on your credit report. Here is how to run the checklist.<\/p>\n
Start here. The RBI explains that a non banking finance company generally needs an RBI certificate of registration, and the RBI website carries a list. See the RBI FAQ on NBFCs<\/a> for how to check. For apps, the RBI\u2019s digital lending directions<\/a> say a listed app does not mean RBI registration or endorsement, so check the lender behind it. Our guide on checking the RBI list before you borrow<\/a> walks through it.<\/p>\n The RBI\u2019s circular on Key Facts Statements<\/a> says lenders must give you a KFS in a standard format before the loan contract is executed, in a language you understand. It covers retail term loans sanctioned on or after 1 October 2024 and has a validity period, so you can compare without pressure. The KFS must show the annual percentage rate (APR), which covers interest and all other charges, plus the repayment schedule. Fees not listed in it cannot be charged later without your explicit consent.<\/p>\n Do not stop at the interest rate. Add the processing fee, insurance or other add ons, and any charge for late payment or early closure. The APR in the KFS gives one yearly cost figure, so use it to compare offers.<\/p>\n Illustrative example: you borrow Rs 50,000 for 12 months. If the lender adds a processing fee and an insurance add on, you repay more than the EMIs alone suggest. Ask for the full repayment total in rupees and compare it across lenders. Our post on hidden loan charges Indians often miss<\/a> lists common ones.<\/p>\n Look at your take home pay, not your gross pay. Subtract rent, food, travel and savings first. Whatever remains is what the EMI can use.<\/p>\nWhat is a Key Facts Statement and why read it?<\/h2>\n
How do I work out the total cost?<\/h2>\n
Will the EMI fit my monthly budget?<\/h2>\n