Interest Rate Policy
How the rate on your loan is arrived at, what it can range between, and every charge that can be levied on your account.
Last reviewed and approved by the Board of Directors on 1 August 2026. This document applies to all customers of Nawkar Finance Limited and is available in Hindi, Marathi, Gujarati and Tamil at every branch on request.
1. Why this policy exists
The Reserve Bank of India requires every NBFC to adopt a Board-approved interest rate model, to disclose the rate and the approach to gradation of risk to each borrower, and to publish that approach. This page is that disclosure.
The intent is simple: you should be able to see why your rate is what it is, and satisfy yourself that it was not arbitrary.
2. What the rate is built from
Every rate we quote is assembled from four components:
- Cost of funds — what we pay our own lenders and investors, plus the cost of maintaining regulatory liquidity.
- Operating cost — sourcing, underwriting, collections, technology and branch infrastructure, allocated per rupee lent.
- Credit risk premium — the expected loss for a borrower of your profile, based on bureau history, income stability, security offered and past conduct with us.
- Tenure premium — longer loans carry more uncertainty and are priced accordingly.
The sum of these four determines the floor. Nothing beyond them is added.
3. Gradation of risk
Two applicants for the same product can receive different rates. The factors that move a rate within its band are:
- Credit bureau score, enquiry intensity and any history of default or settlement
- Whether the loan is secured, and the quality and liquidity of the security
- Income stability, employer or business vintage, and existing debt obligations
- Loan-to-value or fixed-obligation-to-income ratio at sanction
- Prior repayment record with Nawkar — good conduct earns a lower rate on a repeat loan
4. Indicative rate ranges
| Product | Rate range (per annum) | Basis |
|---|---|---|
| Personal Loan | 13.50% – 26.00% | Fixed, monthly reducing balance |
| Business / MSME Loan | 15.00% – 28.00% | Fixed, monthly reducing balance |
| Gold Loan | 11.50% – 22.00% | Fixed, monthly reducing balance |
| Loan Against Property | 10.75% – 18.00% | Fixed or floating, monthly reducing balance |
These are ranges, not offers. Your applicable rate is stated in your sanction letter and Key Fact Statement, and no rate outside the published band is ever charged.
5. Schedule of charges
| Charge | Amount |
|---|---|
| Processing fee | 1.00% – 2.50% of the sanctioned amount, product dependent |
| Penal charge on overdue instalment | 2% per month on the overdue amount only, not capitalised |
| Instrument dishonour | ₹500 per instance plus the bank's actual charge |
| Part-prepayment | 2% of the amount prepaid, permitted after 6 EMIs. Nil on floating-rate loans to individual borrowers |
| Foreclosure | 3% of the principal outstanding, permitted after 6 EMIs. Nil on floating-rate loans to individual borrowers |
| Duplicate statement, NOC or interest certificate | ₹250 per document |
| Loan cancellation after disbursal | Interest for the days utilised plus the processing fee already incurred |
| Stamp duty, valuation, legal and CERSAI charges | At actuals |
| Goods & Services Tax | 18% on all fees and charges |
6. Communication and review
The annualised rate is disclosed in the application form, the sanction letter and the loan agreement. Interest is computed on a monthly reducing balance unless the sanction letter states otherwise.
This policy is reviewed by the Board at least once every financial year, and immediately upon any material change in our cost of funds or in regulation. The current version is always available on this page.
Questions about this document? Write to info@nawkar.in or call +91 90000 00000.