Interest Rate Policy

Basel Investments Limited lends at rates that are high relative to longer-tenure secured borrowing. This policy states what those rates are and how everything a borrower pays is arrived at, rather than leaving the cost to be discovered at an offer screen.

Purpose

This policy is adopted by the board of directors in accordance with the Reserve Bank of India’s directions requiring a non-banking financial company to lay down an interest rate model, to take account of relevant factors in determining the rate, and to make the approach public.

Principles applied

• The published rate is the rate. No charge is levied that was not disclosed in the Key Facts Statement issued before the loan contract was executed.
• The cost is expressed against what the borrower receives. Because the processing fee and the tax on it are deducted before disbursal, the borrower receives less than the amount sanctioned. Every all-inclusive cost figure is computed against the amount actually received.
• Interest is not compounded into penalties. A penal charge is applied to overdue principal only and does not attract further interest.
• Rate changes are prospective. A change to the rate or to any charge is notified in advance and applies only from the date of the change.
• The server computes, not the application. Every figure a borrower is shown is computed by our systems. The application performs no arithmetic on money and treats no locally held figure as authoritative.

Gradation of risk

The rate applicable to a borrower is determined by the board-approved credit policy, taking into account the product applied for, the tenure, the amount, the borrower’s credit history and bureau record, the information furnished during onboarding and verification, the outcome of identity and bank verification, past conduct on any earlier facility with Basel, and the cost of funds and operating cost attributable to the product. A borrower whose assessment does not support an offer is not made one.

Rates by product

How the APR is computed

The Annual Percentage Rate is the all-inclusive annual cost of the credit. It is computed as the total borrowing cost, being interest plus the processing fee and the tax on it, divided by the net amount the borrower actually receives, scaled from the tenure of the loan to 365 days. It is simple, not compounded: it expresses this loan’s cost scaled to a year, not the cost of taking the loan repeatedly for a year.

Two consequences follow, and borrowers should understand both.

• The APR depends on the tenure, not only on the rate. The processing fee is a one-off cost spread over however many days the loan runs. Shorten the loan and the same fee is annualised across fewer days, so the APR rises even though nothing about the pricing has changed. On our Short Term Personal Loan, moving a ₹15,000 loan from 30 days to 29 days moves the APR from 576.61% to 582.22%.
• The denominator is what was received, not what was sanctioned. Computing the same 29-day loan against the sanctioned amount instead would report 513.52%, a materially lower figure for an identical debt. We do not use that method.

Illustrations, not offers. A borrower’s own amount, tenure and APR are stated in the Key Facts Statement issued before the loan contract is executed.

Fees, taxes and other charges

• Processing fee. A one-time, non-refundable fee levied for processing and granting the loan. The rate by product is in the table above. On the unsecured personal loans it is subject to a minimum of ₹199 and deducted before disbursal.
• Goods and Services Tax. 18% on fees and charges that attract it, as the law requires. GST is never charged on interest.
• Foreclosure or prepayment charge. None, at any time, on the unsecured personal loans. Where a secured loan carries a foreclosure charge it is stated in the schedule of charges and the Key Facts Statement. In line with the Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025, no foreclosure or prepayment charge is levied on a floating-rate loan to an individual for a purpose other than business, whether repaid in full or in part.
• Insurance. No insurance product is offered, charged for or bundled with any loan Basel makes.
• Any other charge. None is levied unless it appears in the Key Facts Statement issued to the borrower.

Penal charges

A penal charge of 0.15% per day is applied to overdue principal only. It is a charge for breach of a term of the contract, not a component of the rate of interest. It is not capitalised, so no further interest is computed on it, and it is shown to the borrower as a rupee amount rather than as a rate to be worked out.

A missed repayment is reported to credit information companies and will affect the borrower’s credit record.

The contractual ceiling

The rate of interest on any loan made by Basel shall not exceed 50% per month.

This is a ceiling on the rate. It does not cap the APR, because the APR also carries the processing fee and the tax on it. That is precisely why the APR is disclosed as a figure in its own right, rather than left to be inferred from the rate and the ceiling.

Cooling-off and early settlement

A cooling-off period runs from disbursal on every unsecured personal loan: three days where the tenure is 30 days or less, and seven days where it runs longer. A borrower who exits within it repays the amount sanctioned. No interest for the days held, and no penalty. The processing fee and its GST were deducted before disbursal and are not refunded. Exercising the right is not a default and is not reported as one. The Reserve Bank requires only that the period be fixed by the Board and be no shorter than one day; both windows are set above that floor.

After the window, a borrower settling early pays principal plus interest for the days actually held. Unearned interest is rebated; on an instalment product the rebate follows the reducing balance from the amortisation schedule the offer was priced with. Settling early can never cost more than running the loan to term. While a loan is overdue, foreclosure is withdrawn and the borrower is asked to clear the arrears first.

Communication to the borrower

The rate of interest, the method of its application, all fees and charges, the APR, the total amount repayable, the repayment schedule and the penal charge are set out in the Key Facts Statement issued before the loan contract is executed, and in the sanction letter and loan agreement. The full loan kit is sent to the borrower’s registered and verified email address or mobile number once the contract is executed. See our Fair Practices Code.

Review

This policy is approved by the board of directors and reviewed at least annually, and whenever a change in the cost of funds, the operating environment or applicable regulation requires it. The date of approval and of the most recent review is shown in the document status panel on this page.