Risk Disclosure Statement
1. Interest Rate and Repayment Risks
Before taking a personal loan, borrowers should be aware of the following risks:
- Interest rates may be subject to change based on RBI guidelines and market conditions
- Late payment or default may result in additional charges and penalties
- Prepayment of loans may attract charges as per loan agreement
- Changes in personal income may affect loan repayment capacity
- Economic conditions may impact your ability to service the loan
2. Credit Score and Reporting
Your credit profile can be significantly impacted by loan behavior:
- Delayed or missed EMI payments will negatively affect your credit score
- Loan defaults are reported to credit bureaus and can impact future borrowing
- Multiple loan applications may affect credit score
- Legal action may be initiated in case of persistent default
- Credit history is shared with CIBIL and other credit information companies
3. Documentation and KYC Requirements
Compliance with documentation requirements is crucial:
- Incomplete or incorrect documentation may lead to loan rejection
- Regular KYC updates may be required as per RBI guidelines
- False information provision may result in legal consequences
- Document verification and field visits may be conducted
- Changes in personal information must be promptly updated
4. Terms and Conditions
Understanding loan terms is essential for borrowers:
- Loan terms may be modified as per regulatory requirements
- Additional charges may apply for various services
- Insurance requirements and associated costs
- Recovery procedures in case of default
- Borrower's obligations and responsibilities
5. Digital Transaction Safety
Online loan management requires attention to security:
- Protect your loan account credentials
- Be aware of phishing and fraudulent communications
- Verify authentic communication channels
- Regular monitoring of loan account activities
- Report unauthorized transactions immediately
6. Fair Practices and Grievance Redressal
Understanding your rights and responsibilities:
- Transparent interest rate and fee structure
- Fair recovery practices as per RBI guidelines
- Grievance redressal mechanism availability
- Right to loan statement and documentation
- Privacy and data protection measures
7. Debt Burden Assessment
Understanding your total debt exposure is crucial:
- Maintain a healthy debt-to-income ratio (not exceeding 50%)
- Consider existing financial obligations before taking new loans
- Impact of multiple loans on monthly cash flow
- Emergency fund maintenance while servicing loan
- Assessment of long-term financial implications
8. Regulatory Compliance and Disclosures
Key regulatory aspects as per NBFC guidelines:
- Adherence to RBI's fair practices code for NBFCs
- Mandatory disclosure of all charges and fees
- Compliance with anti-money laundering (AML) guidelines
- Regular reporting of loan status to regulatory authorities
- Adherence to prescribed collection and recovery practices
9. Loan Processing and Disbursement Risks
Important considerations during loan processing:
- Processing time may vary based on documentation completeness
- Disbursement subject to successful verification and approval
- Changes in loan terms during processing period
- Impact of market conditions on loan approval
- Verification of disbursement account details
10. Default Consequences and Recovery Process
Understanding implications of loan default:
- Initiation of legal proceedings under SARFAESI Act
- Impact on guarantor's credit profile and assets
- Recovery charges and legal expenses
- Reporting to credit information companies
- Post-default settlement options and implications
11. Market and Economic Conditions
External factors affecting loan servicing:
- Impact of economic downturn on repayment capacity
- Job market fluctuations and income stability
- Interest rate variations in market conditions
- Sector-specific risks affecting employment
- Policy changes affecting loan terms
12. Borrower Rights and Responsibilities
Essential knowledge for borrowers:
- Right to transparent loan terms and conditions
- Access to loan account statements and documents
- Right to prepay loan with applicable charges
- Grievance escalation process and timelines
- Protection under consumer protection laws
Important Disclaimer:
This risk disclosure statement is provided in accordance with RBI and NBFC guidelines for personal loans. Please read all loan documents carefully before signing.
• Interest rates and charges are subject to change
• Loan approval is subject to credit assessment
• Contact our customer service for any clarifications before taking the loan