What KFS means
KFS stands for Key Facts Statement. It is a short sheet that sums up a loan in a standard format: the amount, the interest, every fee, the APR (the yearly cost of the loan with fees included), the number of payments and the total you will repay. You get it before you sign, so you can see the full price while you can still say no.
RBI rules made the KFS compulsory for retail and MSME (small business) term loans from banks, co-operative banks and NBFCs (finance companies that are not banks), including housing finance companies. A term loan is one you repay over a fixed period. The rule covers loans sanctioned (approved) from 1 October 2024. Digital loans taken through an app need a KFS too.
A short example
Ritu, 31, is offered ₹60,000 for 18 months at 15% a year on a reducing balance (interest only on what she still owes). The processing fee is ₹1,062 including GST, and the lender takes it out before paying her. Her KFS would show figures like these:
| KFS line | Ritu’s loan |
|---|---|
| Loan amount | ₹60,000 |
| Fee taken out | ₹1,062 |
| Amount she receives | ₹58,938 |
| EMI × number of payments | ₹3,743 × 18 |
| Total interest | ₹7,376 |
| Total she repays | ₹67,376 |
| APR | about 17.4% |
The rate says 15%, but the APR says about 17.4%, because the fee is part of the cost. The real price of the loan is the gap between what she repays and what she receives: ₹8,438.
Fictional example. The rate and fee are illustrative, not an offer. Calculated by Paisavy and rounded to the nearest rupee.
Our guide How to read a KFS goes through a full sample sheet line by line, including penal charges, recovery agents and the grievance officer.
What the rules give you
- Time to think. The KFS must stay valid for at least 3 working days. For loans shorter than 7 days, it is at least 1 working day.
- No surprise charges. A charge that is not in the KFS can’t be taken later unless you clearly agree to it.
- One cost number. The APR has to include interest and all charges, even third-party charges that the lender collects from you.
- For digital loans, the lender’s name must appear in the app, and the KFS comes before you accept.
What a KFS is not
It is not the loan agreement. The agreement is longer and has all the legal terms. The KFS is the summary you should read first.
Credit cards are outside this rule. A card has its own document of charges, called the MITC (Most Important Terms and Conditions). So a card EMI conversion does not come with a loan KFS.
A KFS is also not an offer you must take. Getting one does not oblige you to sign. You can ask for KFS sheets from two lenders and compare them.
What to check
- Ask for the KFS before you accept or e-sign anything. If a lender says “we’ll send it later”, wait.
- Put the amount you receive next to the total you repay.
- Compare offers by APR, not by the interest rate.
- Check that every fee in the app also appears in the KFS.
- Keep a copy. You will need it if you are ever charged something that is not listed.
To put two KFS sheets side by side, use Compare two loan offers. Your numbers stay on your device.