Outlook Money
Key Fact Statement (KFS) is a standard summary of loan terms that lenders must share with borrowers during the lending process.
RBI introduced KFS to improve transparency and ensure that loan terms are made easier for borrowers to understand and compare.
KFS helps borrowers to clearly understand total loan cost and compare different loan options before making a decision.
KFS includes loan amount, interest rate, repayment schedule, processing fees, penalties, APR, and other borrowing costs.
RBI made KFS mandatory for retail and MSME term loans from October 1, 2024.
Lenders must share KFS to borrowers before the signing of any loan agreement to allow borrowers to carefully review the terms in advance.
KFS must follow a standard format, use simple language, and disclose all charges clearly, without any ambiguity on hidden charges.