What Is a Key Facts Statement in a Gold Loan?
Disclaimer: This article is for general information/education and is not investment advice. The information is shared in good faith and for general informational purposes only. Ujjivan SFB does not make any representations or warranties regarding the accuracy, completeness, or reliability of the content.
August 31, 2026
A Key Facts Statement (KFS) is a standardised summary of the important terms of a loan agreement. It is provided to the prospective borrower before the loan contract is executed. The KFS allows you to review the loan amount, interest rate, repayment terms and applicable charges without searching through the complete agreement. It carries a unique proposal number, and it is presented in a language selected by or familiar to the borrower as per RBI guidelines.
This article explains what the statement contains, how it differs from the gold-assay certificate and what you should check before signing the loan agreement.
Why is a KFS Provided for a Gold Loan?
The KFS is intended to make loan costs and conditions clearer. RBI requires regulated lenders to provide it for retail and MSME term loans, including applicable gold loans. The lender must explain the contents and obtain an acknowledgement from the borrower. For loans with a tenure of seven days or more, the KFS must generally remain valid for at least three working days. During this period, the borrower can review the terms and decide whether to accept the offer. If accepted within the validity period, the lender is bound by the terms stated in the KFS.
What Information Does a Gold-Loan KFS Contain?
A gold-loan KFS should provide the main financial and repayment details associated with the loan. These generally include:
The RBI's gold and silver collateral rules also require applicable charges, including those connected with assaying and auction, to be clearly disclosed in the loan agreement and KFS. A lender should not charge fees that are missing from the KFS during the loan period without obtaining the borrower's explicit consent. Where the lender collects third-party charges, such charges should be disclosed separately and included while calculating the loan's overall cost.
How Is APR Different From the Interest Rate?
The interest rate shows the percentage charged on the loan principal. The Annual Percentage Rate (APR) represents the annual cost of borrowing after including the interest rate and other associated charges.
For example, two lenders may offer the same interest rate but charge different processing or valuation fees. Their APRs may therefore be different. Looking at both figures gives a more complete view of the offer. The interest rate tells you the basic borrowing cost, while the APR helps show the effect of additional charges. This makes it useful when comparing gold loans from different lenders.
Is the KFS the Same as the Gold-Assay Certificate?
No. The two documents serve different purposes. The KFS explains the financial terms of the loan, including the interest rate, APR, repayment structure and charges. The gold-assay certificate records the details of the gold accepted as collateral.
The assay certificate or e-certificate includes:
The borrower should receive a copy of this certificate. Keeping both the KFS and assay certificate creates a record of the loan terms and the gold pledged as security.
What Should You Check Before Accepting the KFS?
Start by confirming that the sanctioned amount and actual disbursal amount are correct. A deduction may be made if processing or other upfront charges are taken from the sanctioned amount. Compare the interest rate with the APR and review every listed fee. Check whether the loan requires regular installments, periodic interest payments or a single bullet repayment at maturity.
You should also check:
Compare the KFS with offers from other lenders where possible. The lowest advertised interest rate may not always result in the lowest overall borrowing cost.
What If the Loan Agreement Differs From the KFS?
If the loan agreement contains terms that differ from the KFS, ask the lender for clarification before signing. Request a corrected KFS or written confirmation of the applicable terms. You can also raise the matter through the lender's grievance-redressal channel using the contact details provided in the KFS. The statement should appear as a summary section within the loan agreement, making it easier to check whether the terms match.
Final Thoughts
A Key Facts Statement shows the main cost and repayment conditions of a gold loan before you accept it. Reviewing the loan amount, APR, charges and repayment structure can help you compare offers more accurately. The KFS and gold-assay certificate should both be checked and retained until the loan is fully repaid and the pledged gold is returned.
Disclaimer:
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