If you have taken a small personal loan through Ram Fincorp and your outstanding balance has increased significantly because of interest, overdue charges or penalties, it is important to understand exactly how your loan has been calculated before making assumptions about the amount you owe.
Ram Fincorp’s website currently states that it operates as a Lending Service Provider (LSP) and that loan offers are approved and funded by R.K. Bansal Finance Pvt. Ltd., which Ram Fincorp identifies as an RBI-registered NBFC. This distinction is important because borrowers should identify the actual lender named in their loan agreement and Key Fact Statement (KFS), rather than looking only at the name of the loan app or platform.
Why Can a Small Loan Become a Large Outstanding Amount?
A borrower’s total outstanding amount can contain several components, including:
- Original principal
- Regular interest
- Processing fees
- GST on applicable fees
- Late-payment or penal charges
- Bounce charges
- Other disclosed charges
These amounts should be examined separately. A borrower should not simply look at the final outstanding figure and assume that the entire amount represents interest.
For example, Ram Fincorp’s current online loan information states that certain products may have processing fees, penal charges and other applicable charges. Its website currently lists a penal charge of 0.1% per day on principal outstanding for bullet loans and states that the maximum APR for that product may be up to 1,000%, inclusive of interest and applicable fees. These published figures do not establish what rate applies to every borrower; the borrower’s own KFS and loan agreement are therefore essential.
Example: ₹8,000 Loan and ₹22,000 Outstanding
Suppose a borrower originally received ₹8,000 and later receives a demand for approximately ₹22,000.
That does not automatically prove that the lender has acted improperly. However, the borrower has a legitimate reason to request an itemised calculation showing exactly how the amount was reached.
The borrower should ask for:
- Original principal disbursed.
- Regular interest charged.
- Annual Percentage Rate (APR).
- Processing fee.
- GST and other applicable taxes.
- Date-wise overdue or penal charges.
- Any bounce charges.
- Amounts already paid.
- How each payment was adjusted.
- Current principal and interest outstanding.
The borrower should also compare these figures with the Key Fact Statement and loan agreement received when the loan was taken.
What Does RBI Require Regarding Digital Loan Charges?
RBI’s digital-lending framework places emphasis on transparency in the cost of borrowing. For regulated entities, the borrower should receive information about the APR and applicable charges through the required loan documentation, including the KFS.
RBI’s rules on penal charges also require such charges to be reasonable, transparently disclosed and treated separately from the contracted interest rate. Therefore, borrowers who believe that charges have been incorrectly calculated or were not properly disclosed should ask the lender for a written explanation and calculation.
What Should You Do If You Believe the Charges Are Excessive?
Do not rely only on telephone conversations with collection agents.
Instead, make a written complaint and request:
“Please provide the complete loan statement, KFS, loan agreement, APR, principal outstanding, regular interest, penal charges and a date-wise calculation of all overdue charges.”
Ask the lender to explain the contractual basis for every additional charge.
Keep copies of:
- Loan agreement
- KFS
- Loan statement
- Payment receipts
- SMS messages
- WhatsApp messages
- App screenshots
- Collection calls/messages
- Emails
- Complaint reference numbers
Written records are much more useful if the dispute later needs to be escalated.
Who Is the Actual Lender?
This is an important point for borrowers.
Ram Fincorp currently describes itself as an LSP rather than the lender itself. Its website identifies R.K. Bansal Finance Pvt. Ltd. as the lending partner and says the loan is approved and funded by that NBFC.
Therefore, before filing a regulatory complaint, check your own:
- Sanction letter
- KFS
- Loan agreement
- Repayment schedule
- Bank statement showing the disbursement
Find the exact legal name of the lender mentioned in those documents.
How to Complain About a Loan Charge
Start by submitting a written complaint to the lender’s grievance officer. Clearly explain which charges you dispute and request an itemised statement.
If the lender is an RBI-regulated entity and the complaint is not satisfactorily resolved, borrowers can use the RBI Complaint Management System to pursue the appropriate grievance process.
Do not describe a company as a “fraud” or “scam” merely because the amount charged appears high. Instead, document the figures and ask the lender and regulator to establish whether the charges comply with the applicable agreement and regulatory requirements.
What Borrowers Should Remember
A small loan can become substantially more expensive when interest, fees and overdue charges accumulate. The most important step is therefore transparency.
If you borrowed ₹8,000 and are being asked to repay ₹22,000, don’t rely on a verbal explanation. Request the complete calculation in writing.
Check the KFS. Check the loan agreement. Check the APR. Check the date-wise charges.
If something does not match the documents you received when the loan was issued, raise a formal written dispute and retain the evidence.
Consumer Awareness Message
If you are considering an instant loan, don’t look only at the amount you will receive in your bank account. Before accepting the loan, check the APR, total repayment amount, processing fee, GST, repayment period, late-payment charges and penal charges.
Understanding the total cost before accepting a loan can help borrowers avoid unexpected repayment problems later.
Disclaimer: This article is for consumer information and awareness. It does not conclude that Ram Fincorp or any particular lender has violated any law or regulation. The applicable charges depend on the individual loan agreement, KFS, product and lender.