KFS: Key Facts Statement for Loans, APR and RBI Rules
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KFS stands for Key Facts Statement. It is a short, standard summary of a loan that every RBI-regulated lender must give you before you sign. It shows the interest rate, every fee, the APR (the true yearly cost) and the full repayment schedule. A fee not in the KFS can't be charged later without your explicit consent.
- Full form
- Key Facts Statement
- Rule from
- RBI circular of 15 Apr 2024
- Mandatory for
- Retail and MSME term loans sanctioned on or after 1 Oct 2024
- Given by
- Banks, co-operative banks, NBFCs, housing finance companies
- When
- Before you sign the loan contract
- Valid for
- At least 3 working days (1 working day if the loan is for under 7 days)
- Key number
- APR: interest + all charges, per year
- Not covered
- Credit card dues
What is a KFS?
RBI defines a Key Facts Statement as a statement of the key facts of a loan agreement, in simple language, given to the borrower in a standard format. Because every lender uses the same format, you can put two offers side by side and compare them line by line.
- Before you sign: the lender must give it to you before you execute the loan contract.
- In your language: it must be written in a language you understand. The lender must explain it and take your acknowledgement that you have understood it.
- Unique proposal number: each KFS carries one, so you can refer to that exact offer.
- Part of your agreement: the KFS also appears as a summary box inside the loan agreement.
Who must give it, and for which loans
The rule applies to all new retail and MSME term loans sanctioned on or after 1 Oct 2024, including fresh loans to existing customers. That covers home, car, personal, education, gold and small-business term loans. Lenders covered:
- commercial banks, including small finance banks, local area banks and regional rural banks (payments banks are excluded);
- urban co-operative banks, state co-operative banks and district central co-operative banks;
- NBFCs, including housing finance companies;
- loans through apps and websites, where the regulated lender behind the app must give the KFS.
Exempt: credit card dues. Since 28 Nov 2025 these rules sit in RBI's consolidated "Responsible Business Conduct" Directions for banks and for NBFCs, carrying the same rules forward.
How long the offer stays valid
| Loan tenure | Validity of the KFS |
|---|---|
| 7 days or more | At least 3 working days |
| Less than 7 days | 1 working day |
The validity period is your time to agree to the terms after receiving the KFS. If you agree within it, the lender is bound by the terms in the KFS. Use those days to compare offers; don't let anyone rush you into signing the same day.
What a KFS shows
The KFS has two parts. Part 1 is the numbers; Part 2 is other important information.
- Loan amount, tenure and instalments: sanctioned amount, loan term, number and amount of EMIs, and when repayment starts.
- Interest: type (fixed, floating or hybrid) and rate.
- Fees and charges: shown separately as (A) payable to the lender and (B) payable to third parties through the lender, such as insurance or legal charges. Where a charge can't be known in advance, the lender may show an upper limit.
- APR: the yearly cost of the loan including interest and all charges, with a computation sheet.
- Repayment schedule (amortisation schedule) over the whole tenure: principal, interest and outstanding balance for each instalment.
- Contingent charges: penal charges for late payment and whether any pre-payment (foreclosure) charge applies. A pre-payment charge not disclosed can't be levied.
- Part 2: the clause on engaging recovery agents, the grievance redressal mechanism with the nodal grievance officer's contact details, and, for digital loans, the cooling-off period and any lending service provider acting as a recovery agent.
The key rule: "Any fees, charges, etc. which are not mentioned in the KFS cannot be charged … at any stage during the term of the loan, without explicit consent of the borrower." For third-party charges collected by the lender, you must get receipts for each payment within a reasonable time.
APR vs interest rate: an example
The interest rate is charged on the full loan amount. But fees are cut from what you actually receive. The APR measures your repayments against the money that really reaches you, so it is always at least the interest rate, and higher when there are fees. RBI calculates it on the net disbursed amount, using the internal rate of return on the reducing balance.
Sample loan (RBI's own illustration): ₹20,000 for 24 months at 15% fixed, with ₹400 of fees.
- EMI on ₹20,000 at 15% for 24 months = ₹969.73, rounded to ₹970.
- Fees: ₹240 to the lender + ₹160 to third parties = ₹400. You actually receive ₹20,000 − ₹400 = ₹19,600.
- Total interest over the loan ≈ ₹3,274, so you repay about ₹23,274 (₹23,280 with the rounded EMI).
- Repaying ₹969.73 a month for 24 months on ₹19,600 received works out to APR 17.07%, not 15%.
| Offer A | Offer B | |
|---|---|---|
| Interest rate | 15% | 14% |
| Fees | ₹400 | ₹1,000 |
| You receive | ₹19,600 | ₹19,000 |
| EMI | ₹970 | ₹960 |
| Total cost (repaid − received) | ≈ ₹3,670 | ≈ ₹4,050 |
| APR | 17.07% | ≈ 19.27% |
Offer B advertises a lower rate but costs more. Compare APRs, not interest rates. Offer B is a fictional sample calculated the same way.
How to read a KFS before signing
- Check the lender, proposal number and validity date.
- Compare the sanctioned amount with the net amount you will receive.
- Compare offers by APR, not by interest rate.
- Check penal charges and pre-payment charges.
- Read Part 2: recovery agents, grievance officer and, for app loans, the cooling-off period.
- Check the repayment schedule, then acknowledge and keep a copy.
Bank loan vs loan app
- You get the KFS on paper or electronically before signing, in a language you understand.
- Staff must explain it and take your acknowledgement.
- For gold loans from an NBFC, all charges including assaying and auction charges must be in the loan agreement and KFS.
- For floating-rate EMI loans you also get a quarterly statement showing EMIs left and the APR. See rate changes.
Under RBI's Digital Lending Directions, 2025 (8 May 2025):
- Who is the lender? The app may be run by a lending service provider (LSP). The KFS comes from the regulated bank or NBFC, which remains fully responsible.
- Comparing offers: if an app shows offers from several lenders, it must show each lender's name, amount, tenure, APR, monthly repayment and penal charges, with a link to each KFS.
- Documents by email or SMS: the digitally signed KFS, sanction letter and terms must reach your registered email or phone automatically once you sign.
- Cooling-off period: at least one day, set by the lender. You can exit by paying back the principal and the proportionate APR, with no penalty. The lender may keep a reasonable one-time processing fee only if the KFS disclosed it upfront.
- Money flow: the loan must be paid into your own bank account, and you repay directly into the lender's bank account, not an app's pool account. Any LSP fee is paid by the lender, never collected from you.
- Recovery agents: their details must be sent to you by email or SMS before they contact you.
- Your phone data: apps must not access your files, contacts or call logs; one-time camera, microphone or location access is allowed only for onboarding or KYC, with your consent.
No KFS, or charged more than it says?
- Complain to the lender in writing, quoting the proposal number and the KFS line. Use the nodal grievance officer's contact in Part 2. Keep copies.
- Wait 30 days. If there is no reply, or you are unhappy, complain free to the RBI Ombudsman under RB-IOS at cms.rbi.org.in, within 90 days. Helpline 14448.
- App loans: the lender, not the app, is responsible for resolving your complaint. If the app's lender isn't regulated by RBI, RB-IOS can't help; check the lender's name before borrowing.
Safety tips
- No KFS and no named bank or NBFC? Treat it as a warning sign.
- Never pay an upfront "processing fee" to an individual's account or UPI ID to "release" a loan.
- Never share your OTP or UPI PIN with a loan agent.
- Harassed or defrauded? Call 1930 or report at cybercrime.gov.in.
History of the KFS in India
RBI's "Display of information by banks" circular includes instructions on a KFS and APR.
Microfinance loan rules include KFS instructions.
Digital Lending Guidelines require a KFS for app loans.
RBI harmonises the rules into one KFS for all retail and MSME term loans.
The KFS becomes mandatory for every new loan in scope.
Digital Lending Directions, 2025 issued, keeping the KFS and cooling-off rules.
KFS rules carried into consolidated Responsible Business Conduct Directions for banks and NBFCs.
FAQs
What is the full form of KFS?
Key Facts Statement: a standard summary of a loan's rate, fees, APR and repayment schedule, given before you sign.
Is a KFS compulsory?
Yes, for all new retail and MSME term loans sanctioned on or after 1 Oct 2024 by banks, co-operative banks and NBFCs, including fresh loans to existing customers. Credit card dues are exempt.
What is the difference between APR and interest rate?
The interest rate is charged on the loan amount. The APR adds all fees and charges and is worked out on the amount you actually receive. In RBI's example, a 15% loan with ₹400 fees has an APR of 17.07%.
How long is a KFS valid?
At least 3 working days for loans of 7 days or more, and 1 working day for shorter loans. If you accept within that time, the lender must honour those terms.
Can the lender charge a fee that is not in the KFS?
Not without your explicit consent, at any stage of the loan.
Can I cancel a loan taken on an app?
Yes, during the cooling-off period (at least one day). Repay the principal and the proportionate APR; there is no penalty, though a reasonable one-time processing fee may be kept if the KFS disclosed it.
Do I get a KFS for a credit card?
Not under these loan rules; credit card dues are exempt.
My lender didn't give me a KFS. What can I do?
Complain to the lender in writing. If there is no reply in 30 days or you are unhappy, file a free complaint under RB-IOS at cms.rbi.org.in.
Official sources
- RBI – Key Facts Statement (KFS) for Loans & Advances, 15 Apr 2024 (accessed 31 Oct 2026)
- RBI – Non-Banking Financial Companies – Responsible Business Conduct Directions, 2025 (updated as on 1 Jul 2026; KFS, APR illustration) (accessed 31 Oct 2026)
- RBI – Commercial Banks – Responsible Business Conduct Directions, 2025 (updated as on 1 Oct 2026) (accessed 31 Oct 2026)
- RBI – Digital Lending Directions, 2025, 8 May 2025 (accessed 31 Oct 2026)
- HDFC Bank – Key Facts Statement format (Part 2 items) (accessed 31 Oct 2026)
- RBI – Complaint Management System (accessed 31 Oct 2026)
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