Key Fact Statement of a Personal Loan
A key fact statement is a document provided by the bank to potential borrowers just before finalising the loan agreement. This document contains summarised details of the loan, especially the critical aspects such as the applicable rate of interest, repayment schedule, fees, and charges. This is an important document with respect to regulatory compliance, and it also helps the borrower make an informed decision. Read on to learn more about the key fact statement.
Benefits of having a Key Fact Statement for a Personal Loan:
The below-listed are some of the benefits of having a key fact statement for a personal loan:
Transparency: Having a key fact statement puts all the crucial information regarding the loan in one place, ensuring transparency in the loan procedure.
Informed decision-making: A key fact statement has all the details regarding the loan, which helps the borrower compare between loans offered by other lenders and make a more informed decision.
Protection against hidden costs: As the key fact statement has the list of fees and charges, it protects the borrower against hidden costs.
Effective financial planning: The key fact statement also has details of the repayment schedule, which helps the borrower in planning finances well in advance.
Easy grievance redressal: The key fact statement often includes details of the lender's grievance support. This makes it easy to seek help in case of need.
Important Details mentioned in the Key Fact Statement:
The below-listed are some of the important details mentioned in a key fact statement:
- Loan details: A key fact statement has important details of the loan like loan account number, type of loan, sanctioned amount, etc.
- Repayment schedule: Most of the loan lenders provide a repayment schedule in the key fact statement. It also has details like due date of the EMI, the tenure of the loan, prepayment and foreclosure terms, etc.
- Fees and charges: Fees and charges are an important part of any loan, and all its details are mentioned in a key fact statement. This ensures there is no hidden cost.
- Security/collateral: Most of the lending institutions provide details of the security/collateral required for the loan in the key fact statement.
- Customer care services: Most of the lenders also include customer care details in the key fact statement. These details come in handy to the borrower in case of need.
FAQs on Key Fact Statement of a Personal Loan
- For how long is a key fact statement valid?
The validity of a key fact statement depends on the tenure of the loan. If a loan is for a period longer than seven days, a key fact statement is valid for a period of three days. This gives the borrower enough time to review the details before signing the final agreement.
- Is a key fact statement a legally binding document?
No, a key fact statement is not a legally binding document. However, it is indeed a part of the documentation provided with the loan and can be used as a reference in case of disputes.
- Can I reject a loan application after studying the key fact statement?
Yes, you can reject a loan application after studying the key fact statement.
- Can I access a key fact statement online?
Yes, you can access a key fact statement online. Most of the banks provide this facility.
- Is it mandatory for the lenders to provide a key fact statement?
Yes, it is mandatory for lenders to provide a key fact statement.
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