Six clauses to read before signing a loan agreement
The terms that matter are rarely the ones in the sanction letter headline.
5 min read
What you need to know
The sanction letter gives you the rate and tenure. The agreement gives the lender the ability to change several things later. Read these before signing.
Continue your research
Use this guide alongside our product details and eligibility criteria before choosing a lender.
Key points and practical checks
- Reset clause — how often and against which benchmark your rate reprices
- Prepayment and foreclosure charges, and any lock-in period
- Penal charges for delayed EMI and for late document submission
- Cross-default: a default on one facility triggering others
- Insurance bundling — often optional despite how it is presented
- Events of default and the notice period before recall
Frequently asked questions
What is the main takeaway from “Six clauses to read before signing a loan agreement”?
The terms that matter are rarely the ones in the sanction letter headline.
What should I check before acting on this documentation guide?
Start with these checks: Reset clause — how often and against which benchmark your rate reprices; Prepayment and foreclosure charges, and any lock-in period; Penal charges for delayed EMI and for late document submission. Your final eligibility, pricing and approval still depend on the lender’s assessment.
Can the information in this guide guarantee loan approval?
No. It is general educational information. A bank or NBFC makes the final decision after checking your credit profile, repayment capacity, documents and the applicable product policy.
How can iFINTRUST help after I read this guide?
An iFINTRUST advisor can review your requirement, explain the documents normally requested and help you compare suitable lending options before you apply.