Personal Loan Kfs Benefits: It is easy to take Personal Loan nowadays, but it is difficult to understand the complex conditions written in loans documents. In such a situation, Key Fact Statement (KFS) is useful. What is this, know its benefits and reading it is important?
Personal Loan Key Fact Statement: Nowadays taking personal loans has become common. People often take personal loans for work from education to home to build, buy land, take a dream car. But often people do not understand the complex words and conditions written in loans documents. Many times the same thing gives them headache later, because the real expenses and conditions of the loan are not understood properly. In view of this problem, banks and lenders have introduced Key-Fact Statements (KFS). It is a small, easy and simple document in understanding, provided to the customer before taking a loan. The purpose of this is to ensure that the person taking the loan clearly understands all the necessary information, so that he signs the document carefully.
What is Key Fact Statement?
Key Fact Statement is a brief and easy document, in which the main things of the loan are clearly written. This usually includes these information-
- Loan Amount
- Interest Rate
- Loan Term and EMI Schedule
- Processing fees and service charges
- Prepayment or Foreclosure Charges
- Late Payment Penalties on Late Payment or Missed EMI
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What is the benefit of borrowers from KFS?
Complete transparency: It is also shown an annual percentage rate (APR), which makes the real cost of the loan (Interest + All Charges).
No hidden costs): Late fees, fine or other conditions are already reported, so that there is no surprise later.
Easy Comparability: It becomes easier to compare loan offers of different banks or lenders.
Legal Protection: This is a written document, which reduces the chances of any dispute in the future.
Why is it necessary to read the key-fact statement carefully while taking a personal loan?
Key Fact Statement not only brings transparency in the loan process, but also promotes responsible borrowings and lending. It forces the bank or lender to clear the conditions. This makes the customer know what he is signing on. In addition, it also strengthens confidence between the bank and the customer. When everything is clear and written, the possibility of fraud and misunderstandings decreases.
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