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Responsible Lending & Customer Awareness
How loans work, what your CIBIL score means and how to stay safe from loan fraud.
Financial awareness builds better borrowing decisions
Before accepting any loan, a borrower should be able to understand:
- Who they are dealing with
- How much they are borrowing
- What the loan costs
- How interest is calculated
- What documents they are signing
- How repayment works
- What information is collected
- How their information should be handled
- What happens if repayment is delayed
- Where official regulatory information can be checked
Low CIBIL does not automatically mean you cannot borrow
A CIBIL Score is a numerical summary of credit history. A lower score can affect how lenders assess an application, but a score by itself does not represent a person's complete financial circumstances.
Loan decisions may consider multiple factors such as income, employment, existing obligations, repayment history, bank-account information and the lender's applicable credit policy. Different lenders may have different eligibility criteria. Approval is never guaranteed.
What can affect your credit profile
Credit bureaus such as TransUnion CIBIL describe several factors that can influence a score. No single factor explains a score on its own.
Payment history
Paying EMIs and card bills on time is generally viewed positively; delays are recorded.
Credit utilisation
How much of your available revolving credit limit you are using.
Outstanding balances
The amount still owed across your loans and cards.
Recent credit enquiries
Many applications in a short period can be read as a signal of credit need.
Length of credit history
A longer record gives lenders more information to assess.
Credit mix
The balance between secured loans and unsecured credit such as cards.
Current obligations
EMIs and other commitments already being repaid.
Income and employment
Earning pattern and stability, as assessed by the lender.
Banking information
Account activity and other financial details shared with consent.
Learn more from the credit bureau: TransUnion CIBIL · Credit score & loan basics
Know the true cost of your loan
The applicable rate and charges are disclosed in the loan documents. Look for each of these before you accept:
- Loan amount
- Interest rate
- Interest calculation method
- APR / annualised cost, where applicable
- Processing fee
- Taxes
- Other applicable charges
- Tenure
- Repayment frequency
- Penal charges
- Prepayment / foreclosure terms
- Total repayment obligation
What does an interest rate actually mean?
| Monthly rate | The percentage charged each month. 1% a month is roughly 12% a year. |
|---|---|
| Annualised rate | The same rate expressed over a year, which makes loans easier to compare. |
| APR | Where applicable, the all-inclusive annualised cost of a loan, including charges and not only the interest rate. |
| Flat rate | Interest is calculated on the original loan amount for the whole tenure, even as you repay. |
| Reducing balance | Interest is calculated on the amount still outstanding, so it falls as you repay. |
| Total repayment | Principal plus interest plus applicable charges. This is the number to compare. |
Illustrative example only — not an Indifunds offer.
Suppose a hypothetical ₹10,000 loan is repaid over 12 months, excluding fees and taxes:
| 12% a year, flat | Interest ₹1,200. Total ₹11,200. Instalment about ₹933 a month. Because interest stays on the full amount, the cost is roughly 21–22% a year on a reducing-balance basis. |
|---|---|
| 12% a year, reducing balance | Interest about ₹662. Total about ₹10,662. Instalment about ₹888 a month. |
Same headline number, very different cost. Always compare the total repayment and, where provided, the APR.
Read the Key Fact Statement before you accept
A Key Fact Statement (KFS) summarises the key terms of a loan in a standard, easy-to-read format: loan amount, interest rate, APR, fees and charges, repayment schedule, penal charges, applicable terms and other costs.
Where KFS requirements apply to the relevant regulated lending arrangement, the borrower should review the KFS before accepting the loan contract. RBI's Digital Lending Directions, 2025 describe KFS requirements for digital lending by regulated entities. Read the official RBI source →
Your documents deserve careful handling
Depending on the product and the applicable KYC and credit-assessment requirements, a loan application may need: PAN, Aadhaar or another officially permitted identity document, salary slips, bank statements, employment information, address information and other applicable documents.
Documents should be collected only for legitimate and disclosed purposes and handled according to the applicable privacy, security and data-handling requirements. Share documents only through official channels and verify the identity of the organisation requesting them.
Before you share any document
- Verify the official website and domain
- Verify the legal entity and corporate information
- Use official channels, not random personal numbers or unknown email addresses
- Understand why each document is required
- Read the privacy policy
- Never share OTPs, passwords, UPI PINs or banking credentials
- Read the agreement before signing
- Keep copies of submitted documents, payment records and loan documents
Warning signs of a suspicious loan offer
- Guaranteed approval without assessment
- Requests for OTP, PIN or password
- Unexplained advance payment demands
- Personal bank accounts for official payments
- Fake regulatory logos or fake RBI approval claims
- Pressure to sign without reading
- Requests for unnecessary sensitive information
- Unofficial domains or inconsistent company details
Stop, verify, read — then proceed.
Every financial commitment should be documented
You should be able to understand the contractual terms before accepting them. These stages are general; the exact documents depend on the product.
- Application
- Eligibility / assessment
- Offer / loan terms
- Agreement / documents
- Acceptance
- Disbursement, where applicable
- Repayment
- Closure formalities
What responsible lending should look like
General principles that borrowers can expect and ask about from any lender.
- Transparent pricing — rates and charges explained clearly upfront
- Clear documentation — terms a borrower can understand
- Responsible credit assessment — repayment capacity considered before lending
- No misleading guarantees — no promise of approval before assessment
- Clear repayment terms — dates, amounts and charges stated plainly
- Respectful communication — polite, accurate and non-threatening
- Responsible recovery — lawful and with dignity
- Data privacy and security — personal data used for disclosed purposes
- Customer awareness — helping borrowers understand before they commit
How lenders may assess applications
Banks, NBFCs and other lenders can have different credit policies. Assessment may consider:
- Credit history
- Income and employment
- Existing liabilities
- Repayment capacity
- Banking information
- Documentation
- Internal risk policies
- Applicable regulatory requirements
Borrow responsibly
- Borrow only what you can reasonably repay
- Understand the total cost and your existing obligations
- Do not borrow simply because an amount is available
- Review repayment dates and maintain records
- Ask questions before accepting terms
RBI and regulatory updates
Summaries for general awareness, checked on 1 October 2026. Only items from RBI's own publications are listed. Always read the official source for the full and current text.
Reserve Bank of India (Digital Lending) Directions, 2025
RBI consolidated its digital lending instructions into one set of Directions (RBI/2025-26/36). They cover disclosure of the APR and a Key Fact Statement before the loan contract, a cooling-off period to exit a digital loan, and direct flow of disbursal and repayment between the borrower and the regulated lender.
Read the official RBI source →Fair Lending Practice – Penal Charges in Loan Accounts
RBI circular RBI/2023-24/53 says a penalty for breaching material loan terms should be a "penal charge" rather than extra "penal interest" added to the rate, with no further interest on such charges. The amount and reason are to be disclosed in the loan agreement and KFS where applicable. Implementation dates were later set from 1 April 2024.
Read the official RBI source → Search the circular number under Notifications on rbi.org.in.RBI cancels Certificate of Registration of 36 NBFCs
RBI publishes registration-related announcements for NBFCs in its press-release section. Borrowers can use RBI's official publications to check an NBFC's current registration status.
Read the official RBI source →FAQs: "All you wanted to know about NBFCs"
RBI's public FAQ explains what NBFCs are and notes that interest rates charged by NBFCs are not subject to a ceiling; the rate is governed by the loan agreement. This is why reading the agreement and comparing total cost matters.
Read the official RBI source →This is an Indifunds page. It is not an RBI page and is not affiliated with or endorsed by RBI.
Corporate transparency
| Brand | Indifunds |
|---|---|
| Legal entity | Devdhan Narayana Finserv Private Limited |
| CIN | U66190UP2024PTC210110 |
| Office | C 44, Block C, Sector 51, Noida, Gautam Buddha Nagar, Uttar Pradesh - 201301 |
Corporate information can be checked on the official Ministry of Corporate Affairs portal: open MCA Services, choose "View Company/LLP Master Data" and enter the company name or CIN. This page does not reproduce MCA news. Visit the MCA portal →
Frequently asked questions
What is a CIBIL Score?
A CIBIL Score is a numerical summary of credit history, generated from information in a credit report maintained by TransUnion CIBIL.
Does a low CIBIL Score automatically mean loan rejection?
Not automatically. A lower score can affect how a lender assesses an application, but lenders may also consider income, obligations, repayment history and their own credit policy. Approval is never guaranteed.
What factors can lenders consider?
Credit history, income, employment, existing liabilities, repayment capacity, banking information, documentation, internal risk policies and applicable regulatory requirements.
What is APR?
Annual Percentage Rate is the effective annualised cost of a loan. Under RBI's digital lending framework it is an all-inclusive cost that is disclosed upfront, where applicable.
What is a KFS?
A Key Fact Statement is a standard summary of a loan's key terms, such as amount, APR, fees, repayment schedule and penal charges, to be reviewed before accepting the loan contract where it applies.
What is the difference between flat and reducing interest?
Flat interest is calculated on the original amount for the whole tenure. Reducing-balance interest is calculated on the outstanding amount, so the same headline rate usually costs less.
What documents may be required for a loan?
Depending on the product, this may include PAN, an officially permitted identity document, salary slips, bank statements, employment and address information, and other applicable documents.
How should I safely share financial documents?
Use only official channels, verify the organisation, understand why each document is needed, and never share OTPs, PINs or passwords.
Why should I read the loan agreement?
The agreement sets out your rate, charges, repayment schedule and penal charges. Understanding it before acceptance helps you avoid surprises later.
What are common loan scams?
Common signs include guaranteed approval, advance-fee demands, requests for OTP or PIN, payments to personal accounts, fake regulatory claims and unofficial websites.
How can I verify RBI information?
Read notifications, circulars and press releases directly on the official RBI website at rbi.org.in rather than relying on forwarded messages or third-party summaries.
How can I verify company information through MCA?
On mca.gov.in, open MCA Services, choose View Company/LLP Master Data, and enter the company's name or CIN to see its registered details.
Official resources
Links to these organisations do not mean that they endorse Indifunds. Regulatory information on this page is provided for customer awareness and educational purposes. References to RBI, MCA, CIBIL, banks, NBFCs or other institutions do not mean that such institution has endorsed, certified or approved Indifunds. Verify current regulatory information directly from the relevant official source. Product terms, pricing and eligibility remain subject to the applicable product documentation and assessment.
