Interest Rate Policy
1. Background
The Reserve Bank of India ("RBI") vide its notification DNBS.204/CGM (ASR)-2009 dated January 2, 2009, and the Master Direction DNBR. PD. 007/03.10.119/2016-17 dated September 1, 2016, and subsequently amended from time to time, advises that the Non-Banking Financial Companies (NBFCs) and their Board of Directors undertake a comprehensive review of their internal principles and procedures and implement an interest rate model that factors in critical elements such as the cost of funds, margin, and risk premium in order to determine the rate of interest to be charged for loans and advances.
This model ensures alignment with RBI guidelines and promotes financial stability and responsible lending practices. FinMudra Credit Pvt. Ltd. (hereinafter referred to as "Company") shall adopt all such guidelines prescribed by RBI and make modifications if necessary. Operating under the brand "FinMudra," this name represents FinMudra Credit Pvt. Ltd. for all purposes. In compliance with regulatory requirements and the Fair Practices Code, the Company has adopted this Interest Rate Policy outlining its Interest Rate Model and risk gradation approach for its lending business.
2. Disclosure
The interest rate determination process and interest rate shall be disclosed on the Company's website and shared with the customer in a timely and transparent manner.
3. Interest Rate
The policy is approved by the Board of Directors and considers all relevant factors such as cost of funds, margin, and risk premium. Rates may vary by borrower based on risk profile, credit score, operational expenses, and other factors.
• Loan Amount Range: ₹5,000 to ₹5,00,000
• Repayment Period: 7 days to 3 months
• Maximum Annual Rates (Q4FY2025): 108% for Personal loans, 510.25% for Salary Advance loans
• Target Maximum Rates (Q4FY2026): 72% for Personal loans, 382.5% for Salary Advance loans
All loans are Fixed Rate and repaid via EMIs or Bullet repayment through electronic channels. Interest is payable immediately on the due date. Penal interest may apply for delayed payments.
4. Fees & Charges
Besides interest, borrowers bear fees such as processing, credit assessment, or origination/conversion fees (5–10% of loan amount). Charges also apply for EMI mandate returns, loan rescheduling, or other services.
Fees are collected only from borrowers who avail the loan. Service tax and other cesses are collected as applicable. Any revision of charges is prospective. Refunds or waivers are at the Company's sole discretion.
5. Customer Communication
The Company communicates the final fixed interest rate and fees at the time of sanction via the Sanction Letter and loan documentation. Borrowers receive a copy of the loan agreement after disbursal.
6. Amendment
This policy may be amended or modified in whole or in part, at any time without assigning any reason, with the approval of the Board.