Lesson 43 of 53 · A personal loan’s true cost · 3 min read · Reviewed 29 Oct 2026
The annual percentage rate is the yearly cost of the loan including interest and every other charge, such as processing fees. Since 1 Oct 2024 lenders must give a Key Facts Statement with the APR and repayment schedule before you sign, and can’t charge anything it leaves out without your consent.
The interest rate isn’t the whole cost. Processing fees and other charges raise it, and the APR includes them.
Every retail loan comes with a Key Facts Statement showing the APR and the repayment schedule, valid for at least 3 working days.
A charge not in the statement can’t be added without your explicit consent.
Key idea: Floating-rate loans carry no prepayment charge. Most personal loans are fixed-rate, where the lender’s charge must be in the statement.
Try the short quiz on this page to check what stuck.
No. A penalty must be a separate charge, not added to the rate.
To retail loans sanctioned from 1 Oct 2024.
By the APR on each Key Facts Statement, not the interest rate.
For learning only, not investment advice. Built in India by a team that tracks its own money on Reva.