Lesson 1 of 3 · 8 min
The page that comes before the contract
Since October 2024 every retail term loan must arrive with a standardised statement of key facts, and the lender is bound by what it says for a stated window.
A loan agreement is thirty pages of clauses drafted by the lender's lawyers, handed over at the moment you are least able to read carefully. The regulator's answer was not to shorten the agreement. It was to require a separate, standardised page in front of it that states the facts that actually decide what the loan costs you.
The actual document
The one page the lender must hand you before the thirty
Sahyadri Finance Ltd
Key Facts Statement · personal loan · 5 October 2026
- Applicant
- S. Iyer
- Product
- Personal loan
- Valid until
- 8 October 2026
The loan
- Sanctioned amount₹3,00,000
- Tenor36 months
- Interest rate15% a year, floating
- Monthly instalment₹10,400
What sits on top
- Upfront fee (2%)₹6,000
- Tax on that fee₹1,080
- Fees and tax₹7,080
Also on the page
- Actually credited to you₹2,92,920
- Cooling-off period3 days
- Recovery agencyNamed, with contact details
A fictional statement. Mandatory in this format on retail loans sanctioned from 1 October 2024, from banks and NBFCs alike.
Tap a numbered marker to see what that line means.
- 1
Interest rate. The number the advertisement leads with, and on its own it decides nothing — it says what the interest costs, not what the loan costs.
- 2
Upfront fee (2%). Deducted before the money reaches you, so you repay interest on ₹3,00,000 while having received less than that. This is the mechanism that pushes the real rate above the advertised one.
- 3
Actually credited to you. ₹3,00,000 less the fees. The gap between this and the sanctioned amount is the whole reason the APR below is not 15%.
- 4
Cooling-off period. Exit inside this window paying only the interest for the days used, and no prepayment penalty. It exists because the regulator knew where these are signed and how fast.
- 5
Annual Percentage Rate (APR). Interest and fees together, as one rate. This is the only number on the page built for comparing two lenders — and it is 1.7 points above the rate the same lender advertises.
It applies to all retail and small-business term loan products from every regulated lender — banks, small finance banks, co-operative banks and non-banking finance companies alike. Every new loan of that kind sanctioned on or after 1 October 2024 has to comply. The statement has to be written in a language the borrower understands, its contents have to be explained to them, and the lender has to obtain an acknowledgement that they understood it.
Your turn
How many working days is a key facts statement valid for, at minimum, on a loan with a tenor of seven days or more?
Nobody gave me three days
KabirTara
Kabirasking
When I took my loan they wanted a signature the same afternoon. Nobody mentioned a three-day window.
Taraexplaining
The window is yours whether or not it is mentioned. It exists because the pressure you describe is exactly what it was written against — and the number on the statement is what the lender is held to during it.
Kabirasking
So what do I actually do with three days?
Taraexplaining
Read the statement rather than the agreement, which is the point of having it. Compare it with another lender's statement — they are in the same format, which is what makes comparing possible at all.
Myth
“The key facts statement is a summary the lender writes however it likes.”
False
The format is standardised and prescribed, which is what makes two lenders' statements comparable. It also has to be reproduced as a summary box inside the loan agreement itself, so the agreement cannot quietly say something different.
Check yourself
1 / 3
Kabir asks
What is a key facts statement?
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