Purpose and scope
This policy establishes a transparent, consistent and fair framework for determining, reviewing and communicating interest rates across Recapita Finance’s lending products, in compliance with RBI regulations and the Fair Practices Code. It applies to Gold Loans, Personal Loans, Business Loans (secured/unsecured), Loans Against Property, Rooftop Solar Financing and any future lending products.
Effective interest-rate ranges
Recapita Finance primarily offers loans on a fixed interest-rate basis. Current offered rates range as follows (the rate applicable to a specific loan depends on the borrower’s risk profile, tenure and collateral, and is stated in the sanction letter and Key Fact Statement):
| Product | Interest rate (per annum) |
|---|---|
| Gold Loans | 12% – 24% |
| Unsecured Loans | 12% – 28% |
| Other Secured Loans | 12% – 25% |
Factors influencing interest rates
Rates are determined by a blend of the cost of funds, credit-risk premium, operational costs, return on capital employed, liquidity premium and tenure adjustment. For gold loans, additional factors include gold-price volatility, the cost of secure custody, storage and insurance, and the high volume of small-ticket transactions.
Gold loan interest-rate structure
| Scenario | Interest rate structure |
|---|---|
| Regular monthly interest payment | 12% – 15% p.a. — a lower rate to encourage consistent monthly payments. |
| Delayed interest payment | 18% – 24% p.a. — a higher (“jumping”) rate applied when payments are delayed. |
| Top-up loans (on gold-rate increase) | Base rate remains the same; additional funds disbursed on request as the gold value rises. |
| Bullet repayment (principal) | Allowed at the end of the loan term, with the principal remaining constant. |
| Prepayment | No penalty for early repayment of either interest or principal. |
| Tenure options | 3 months to 1 year, aligning with the typical structure of gold loans. |
Gradation of risk
A risk-grading framework is applied to both secured and unsecured loans. Applicants must first meet the Minimum Acceptable Criteria (CIBIL score, debt-to-income ratio and repayment history), after which a weighted scorecard assesses repayment history, collateral quality and financial stability. The resulting risk category drives the risk premium built into the interest rate — for example, a low-risk secured loan may carry a premium of around 1.5%, while a high-risk unsecured loan could see premiums as high as 6%.
Communication of interest rates and charges
All terms — including jumping rates and other charges — are disclosed in the Sanction Letter and Pledge Form. Specific fees and charges (processing fees, penal charges and prepayment charges) are listed in the Key Fact Statement. Any rate adjustments are communicated to customers by email, SMS or postal mail. The full policy and risk-gradation framework are published on this website.
Other charges and fees
| Charge | Details |
|---|---|
| Processing fees | Determined by product type and loan amount; specific fees outlined at loan sanction. |
| Prepayment charges | Nil for individual floating-rate loans; up to 5% on other loans for early closure before the agreed tenure. |
| Penal charges | Up to 24% p.a. (non-capitalised) applied on the overdue principal amount only, to discourage late payments. |
| Cheque bouncing charges | ₹500 plus GST per instance of cheque dishonour or payment bounce. |
| Auction charges | For secured loans such as Gold Loans, auction-related charges may apply where recovery through auction becomes necessary, as per the loan agreement. |
| Stamp duty and taxes | Collected in accordance with applicable statutory requirements. |
Rates and charges quoted above are indicative and may be revised prospectively at the Company’s discretion in accordance with this policy and applicable RBI norms. Your applicable rate and charges are confirmed in your sanction letter and Key Fact Statement.