Personal Loan Interest Rates: Big update regarding interest rate on EMI, know what instructions the banks received from RBI on interest…

Personal Loan Interest Rates: Reserve Bank of India (RBI) in its circular has directed all banks to provide all types of EMI based personal loans at fixed interest rates.

Apart from this, it has also been said in the FAQ related to EMI based personal loans that all types of EMI based personal loans come under the purview of the circular, whether the interest rate is linked to an external benchmark or an internal benchmark.

Complete information in loan agreement

Meanwhile, RBI also clarified that whatever is being applied while sanctioning the loan, whether it is the annual interest rate or the annual percentage rate, its complete information should be given in the Fact Statement (KFS) and the loan agreement.

Apart from this, if there is any increase in EMI or loan repayment period based on external benchmark rate during the loan tenure, then the borrower must be informed about the same.

Apart from this, quarterly statements also have to be given, in which the borrower can get information about the principal amount and interest rate till that time, EMI amount, remaining EMI and annual interest rate for the loan period.

More people are taking loans (Personal Loan Interest Rates)

The report shows that the number of people taking more than one loan has increased in the last few years. There are about 50 lakh people taking small loans who have taken loans from four or more lenders.

As of November, their number is about 6 percent of the total borrowers. Not only this, data from credit bureau CRIF High Mark shows that the number of people taking loans from three or more lenders is 1.1 crore.