Interest Rate & Penalty Model
Board-approved methodology for risk-graded interest rate determination, transparent APR computation, and statutory penal charges.
1. Risk-Graduated Interest Rate Pricing
Udaann Capital NBFC Limited determines the rate of interest for each lending product based on a comprehensive risk-graded matrix taking into account:
- Cost of capital and operational overheads of the digital lending platform.
- Credit Bureau score (TransUnion CIBIL / Experian inquiry).
- Debt-to-Income (DTI) ratio and verifiable monthly bank cash flows.
- Borrower employment profile (Salaried Corporate, Professional, or MSME Business).
- Collateral free unsecured nature of personal lending facility.
2. Standard Loan Products & Interest Slabs
| Product Name | Loan Limit | Annual Interest Rate (Reducing) | Tenure Range |
|---|---|---|---|
| Personal Loan | ₹25,000 - ₹5,00,000 | 12.0% - 24.0% p.a. | 6 to 36 Months |
| Business Loan | ₹1,00,000 - ₹20,00,000 | 14.0% - 28.0% p.a. | 12 to 48 Months |
| Salary Advance | ₹10,000 - ₹1,00,000 | 15.0% - 26.0% p.a. | 3 to 12 Months |
3. Fair Lending Practice: Penal Charges (No Compounding)
In strict compliance with RBI circular RBI/2023-24/53 (DOR.MCS.REC.28/01.01.001/2023-24) on Fair Lending Practice - Penal Charges in Loan Accounts:
Penal charges for delayed EMI payments are treated as separate statutory fees. Under no circumstances are penal charges capitalized or added to the principal balance to charge further interest.
Late payment charges are capped at reasonable fixed default charges (e.g. ₹500 + GST for overdue EMIs), designed solely to inculcate credit discipline rather than revenue maximization.
4. Zero Foreclosure / Part-Prepayment Penalty
In compliance with regulatory directions, Udaann Capital NBFC levies ZERO (0%) prepayment or foreclosure penalties on all floating rate personal loans sanctioned to individual borrowers. The borrower has the right to prepay or close their loan account anytime without penal cost.