Type of Charges | Rate or Amount |
---|---|
Loan Processing Charges | 6.50% |
Document Charges | 1.00% |
Online Convenience Fees | ₹ 200 |
IGST (as per Government) | 18% |
Cheque / ECS / SI Return Charges | ₹ 500 + GST |
Foreclosure Charges | 4% of the outstanding principal + GST |
Illustration
Type of Charges | Rate or Amount | Actual Amount |
---|---|---|
Loan Amount | ₹ 10,000 | ₹ 10,000 |
Loan Processing Charges | 6.50% | ₹ 650 |
Document Charges | 1.00% | ₹ 100 |
Online Convenience Fees | ₹ 200 | ₹ 200 |
IGST (as per Government) | 18% | ₹ 171 |
Net Disbursed Amount | - | ₹ 8,477 |
MIPL’s goal in levying additional charges is to promote timely repayment and discourage intentional defaults. In deserving cases, such charges may be waived or settled at lower rates.
Penalty Charges: MIPL’s policy ensures compliance with RBI guidelines. Penalty charges are determined by the overdue duration, are not capitalized, and adhere to transparency principles. Details will be disclosed in the loan agreement and Key Fact Statement, with borrowers notified during overdue reminders.
Legal Fees: In case of default, legal charges may include attorney fees, court costs, and other related expenses. These will become part of the borrower’s total outstanding debt.
Insurance Fees: Insurance services may be offered through MIPL’s partners. These optional features are at the borrower’s discretion.
Deferred Interest: Interest accrued but unpaid during the agreed repayment period may be added to the outstanding loan amount.
4. DISCLOSURE
This Interest Rate Policy will be transparently disclosed on the company’s website.
5. POLICY REVIEW
The policy will be periodically reviewed and updated, subject to approval by the Board of Directors.
Interest Rate Model and Approach
1. INTRODUCTION
Madhur Instalments Private Limited (“MIPL”) is committed to maintaining transparency and adhering to the directives of the Reserve Bank of India (RBI). In line with these objectives, the company has established the following interest rate policy:
2. INTEREST RATE MODEL AND APPROACH FOR GRADATION OF RISK
The determination of interest rates for loans is guided by RBI’s regulations and the following parameters:
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Broad factors influencing the interest rate:
a) Fixed Interest Rate
b) Credit and default risk in Personal Loan Portfolio
c) Output of application scorecard
d) Historical performance of similar homogeneous clients
e) Profile of the borrower
f) Industry segment & associated risk factors
g) Payment Gateway Cost
h) API Costs – 3rd party services – Legal services, mandate services, e-KYC, non-traditional data decisioning
i) Repayment track record of the borrower
j) Ticket size of loan
k) Bureau Score
l) Tenure of Loan
m) Employment History
n) Location delinquency and collection performance
o) Customer Indebtedness (other existing loans)
p) Pricing offered by competition and other relevant factors
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Interest rates will be communicated to borrowers at the following stages:
a) During the final loan offer, where borrowers can either accept or decline; and
b)At the time of loan sanctioning or disbursement.
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Interest rates and risk assessment fees may differ between borrowers for similar products and tenures, based on individual assessments.
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Loans will be offered on a fixed interest rate basis.
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Interest will be calculated on the sanctioned loan amount.
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Borrowers are required to make interest payments as specified in the loan agreement.
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No interest will be paid on credit balances in borrower accounts.
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The final lending rate for each product will consider factors such as market reputation, prevailing interest rates, borrower’s credit risk, historical performance, and administrative costs. These insights will be derived from borrower-provided information, credit reports, market data, and other sources available to MIPL.
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The lending rate will not fall below the lowest interest rate charged on funds borrowed by MIPL. Rates are subject to managerial discretion based on the company’s set variables.
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Once agreed upon and documented in the loan agreement or Key Fact Statement, borrowers are obligated to adhere to the specified interest rate terms.
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Risk-return pricing is integral to risk management. Advanced machine learning algorithms are employed to assess borrower profiles and credit scores, resulting in interest rates ranging from 2.33% to 9% monthly for personal loans and 2.7% to 4.5% monthly for business loans.
3. PROCESSING / DOCUMENTATION AND OTHER CHARGES
1. Processing, documentation, and other applicable charges will be explicitly stated in the Loan Agreement or Key Fact Statement. The following fees may apply on a case-by-case basis: