Cost to Lender

Consumer Voice - - Taxi Loans -

Guar­an­tee fee (GF)

An­nual ser­vice fee (ASF)

The Credit Guar­an­tee Scheme leaves it to the dis­cre­tion of the MLIs to de­cide about pass­ing on the in­ci­dence of guar­an­tee fee and an­nual ser­vice fee to the bor­rower – in fact, they may de­cide to bear it them­selves.

Re­gard­ing the in­ter­est rate payable by bor­rower, the MLI shall fol­low the guide­lines is­sued by RBI. In any case, in­ter­est rate shall not ex­ceed three per cent over and above the prime lend­ing rate of the MLI, ex­clud­ing the an­nual ser­vice fee.

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