The Borrower's Guide to the Key Fact Statement (KFS)

What is a Key Fact Statement (KFS) for a loan?

A Key Fact Statement (KFS) is a standardised disclosure provided by applicable regulated entities to give borrowers key information about a loan before the loan agreement is executed. It details the loan amount, Annual Percentage Rate (APR), and key terms in a simple format.

Why the Key Fact Statement is Important

The KFS is designed to provide complete transparency. By mandating a standardized format, it ensures that borrowers can easily understand the true cost of their loan, compare offers across different platforms, and avoid hidden fees. It breaks down complex financial terms into a single, easy-to-read document.

What Information Must Be in a KFS?

A standard KFS will clearly list the loan amount, the applicable interest rate, the Annual Percentage Rate (APR), processing fees, any other upfront charges, and the exact EMI schedule. It also includes the contact details of the grievance redressal officer.

When is a KFS Provided?

Borrowers must receive the KFS before they digitally sign the loan agreement or accept the loan terms. This gives you the opportunity to review the exact costs and repayment schedule before committing.

How to Read Your KFS Before Accepting a Loan

When reviewing your KFS, focus on the APR—which represents the total cost of borrowing—rather than just the nominal interest rate. Check the total amount you will repay over the tenure, the exact EMI amount, and any specific terms regarding prepayment or foreclosure.

Frequently Asked Questions

What is the difference between KFS and a loan agreement?

The KFS is a simplified summary of the most critical terms of the loan, designed for quick understanding. The loan agreement is the full, detailed legal contract.

Does a KFS guarantee loan approval?

No. A KFS is provided once you are approved and offered specific terms, but you must accept it for the loan to be executed.

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