Reserve Bank of India caps digital EMIs at half income
The Reserve Bank of India (RBI) just rolled out new rules for digital loans, hoping to make borrowing safer and clearer for everyone.
Now, lenders can't let your equated monthly installments (EMIs) go over one-half of your monthly income, and your credit score matters more than ever when getting approved.
Plus, all costs (interest rates, fees, and penalties) have to be spelled out upfront in a Key Facts Statement.
RBI links offers to credit score
With these guidelines, loan offers depend on your credit score: better scores mean sweeter deals.
You'll get a full breakdown of what you owe before signing anything, and there's even a cooling-off period if you change your mind, just pay back the principal and interest.
Lenders also have to check your financials with stricter know-your-customer (KYC) norms using bank statements, Income Tax Returns (ITRs), and current employment status.
Overall, it's about keeping things transparent and making borrowing less risky.