Processing Fee Deducted Upfront But Interest Charged on Full Amount
You applied for a Rs.10,000 loan but received only Rs.8,500 after processing fee deduction. However, your interest is calculated on Rs.10,000 — the full amount you never had use of. The disclosed interest rate does not reflect this reality.
⚖️Your Rights Under RBI Regulations
The APR must reflect the true cost of the loan including all fees — the effective rate on the amount you actually receive must be disclosed.
If the APR was understated because of processing fee capitalisation, this is a disclosure violation.
Any charges not in the KFS are disputed.
💰 What You Can Recover
Excess interest paid on the unrecieved amount (processing fee) can be disputed.
⏱ Response Deadline
30 days.
📋Step-by-Step — What to Do
Calculate the APR on the amount you actually received (Rs.8,500 not Rs.10,000).
Compare to the disclosed APR — if different, write to GRO with calculation.
File with RBI Ombudsman or sachet.rbi.org.in.
🏛 Where to Escalate If Bank Doesn't Respond
sachet.rbi.org.in + RBI Integrated Ombudsman
Facing this issue with your Bank, NBFC, MFI, SFB or Fintech?
AI merit analysis + expert-drafted RBI-backed communication. Starting at ₹199.
File Complaint →Check my rights first →Use our Free Instant Rights Tool — type your problem, get your exact rights in seconds.
Check My Rights Free →