Most loan blogs promise “no hidden charges” and stop there. That’s a promise, not proof. Below is the receipt. Every rupee you pay on a Branch loan, what it’s for, and how it’s calculated. If you’re the kind of person who reads terms and conditions before tapping accept, this is for you. If you’re not, this is definitely for you.
We’ll use a real Branch offer across this piece so the math is concrete instead of hypothetical:
- Loan amount: ₹1,40,000.
- Tenure: 24 months.
- Interest rate: 27.01% p.a.
- Processing fee plus GST: ₹3,304.
- Monthly EMI: ₹7,614.
- APR: 29.59%.
Your actual numbers will depend on your credit profile, credit score, CIBIL score, and the loan amount you’re eligible for. Every one of them appears on your Key Fact Statement before you sign.
The interest
Interest is the biggest line on any loan. On a Branch loan it’s calculated on a reducing balance, which means you pay interest only on what you still owe, not on the original sanctioned amount. Your EMI stays constant across the tenure, but the split between interest and principal shifts month by month. The early EMIs are interest-heavy. The later EMIs are principal-heavy. That’s how a reducing-balance loan works everywhere, not a Branch quirk.
On the offer above, the interest rate is 27.01% per annum. That’s the rate applied on the reducing balance every month. There is no single fixed number that applies to every borrower. Your rate depends on your credit score, income, and repayment history, and the exact percentage for your loan is on the Key Fact Statement before you accept anything.
The processing fee
This is the one-time fee for underwriting your loan. Running your CIBIL, reading your bank statement, verifying your KYC, and issuing the loan agreement all cost money to do. The processing fee covers that.
On our ₹1,40,000 example, the processing fee is ₹2,800, which works out to 2% of the sanctioned amount. It’s deducted from the disbursal, so your bank receives the sanctioned amount minus this fee and the GST on it. Your EMI is still calculated on the ₹1,40,000 principal, because that’s what you legally owe on paper. Every rupee is disclosed on your Key Fact Statement in numbers, not percentages you have to convert.
GST on the processing fee
The Government of India charges 18 percent GST on financial service fees, and we pass it through. On the ₹2,800 processing fee above, GST is ₹504. This isn’t a Branch charge. It’s a tax we collect on the government’s behalf and remit.
Add the fee and the GST together, and you get ₹3,304. On a ₹1,40,000 loan, that means ₹1,36,696 lands in your bank account on disbursal. All of it is on your Key Fact Statement before you accept, not in an email that shows up three days later.
Why APR is the more honest number
You’ll notice two rate numbers in the sample offer: 27.01% (the interest rate) and 29.59% (the APR). The gap isn’t a trick.
APR stands for Annualised Percentage Rate, and it bundles every mandatory charge, not just interest. APR is interest rate plus processing fee plus all charges, expressed as a single annualised percentage. That’s why the APR on the ₹1,40,000 example is 29.59% while the flat interest rate is 27.01%. If you want to compare loan offers across lenders like-for-like, the APR is the number to compare, not the flat or reducing rate.
What Branch doesn’t charge
A “no hidden charges” promise only means something if you know what could have been charged. Here’s what does not appear on a Branch loan.
No documentation fee on top of the processing fee. No convenience fee for using the app. No mandatory bundled insurance you can’t opt out of. No annual maintenance charge on the loan. No verification fee. No login or application fee.
Some of these are common in the wider market. None of them show up on a Branch loan.
What happens if things go sideways
Life happens. Payday shifts by a week. The auto-debit fails because you moved money for a UPI transfer. Two lines on your KFS cover these situations, and they’re worth reading before you need them, not after.
If your EMI bounces, a bounce charge applies, in line with market practice. If an EMI is missed beyond the due date, a late fee applies on the overdue amount, along with penal interest. Both numbers are on your KFS the day you sign. There are no surprise “penalty” charges invented later. If it isn’t on the KFS, it doesn’t apply.
If you want to close the loan early, prepayment or foreclosure terms are also on the KFS. Some tenures allow prepayment freely; others carry a small foreclosure charge that’s spelled out upfront.
The full picture on the ₹1,40,000 example
Putting all the lines together, using the sample offer at the top:
Sanctioned amount: ₹1,40,000. Interest rate: 27.01% per annum on reducing balance. Tenure: 24 months. Processing fee: ₹2,800 (approximately 2% of sanctioned). GST at 18% on the fee: ₹504. Processing fee plus GST: ₹3,304. Amount that lands in your bank account: ₹1,36,696. Monthly EMI: ₹7,614. Total repayment across 24 EMIs: ₹1,82,736. APR: 29.59%.
Every one of those numbers is on the Key Fact Statement before you accept. Nothing gets added later. Nothing gets emailed three months in.
Actual EMI and rate depend on your credit profile, credit score, CIBIL score, and the loan amount you qualify for. The ₹1,40,000 case above is one illustration, not a promise for every borrower.
Why Branch prices this way
Two reasons, neither of them noble.
First, the 2022 RBI Digital Lending Guidelines require it. Every regulated lender has to publish a Key Fact Statement with every fee spelled out, in a standard format. That’s the price of operating inside the regulated NBFC framework, and it’s a floor, not a ceiling.
Second, it’s how we compete. Loan apps distributed through Telegram forwards and shady APK sites can promise anything, because they’re outside the framework, and they eventually run into RBI action. Our version of trust is boring, verifiable pricing. Show the receipt, then let the borrower decide.
Five things to check on any KFS, ours or anyone else’s
Sanctioned amount versus disbursal amount, with the reason for any gap on the same page. APR, alongside the flat or reducing interest rate. Processing fee as a rupee number and a percentage, with GST clearly noted as included or extra. Late payment and bounce charge structure. Prepayment or foreclosure terms.
If any of that is missing on a lender’s KFS, don’t proceed. If all of it is there, you have enough information to compare like for like.
Frequently asked questions
Yes. Every fee that applies to your Branch loan is on the Key Fact Statement you see before accepting. That includes the interest rate, processing fee, GST on the processing fee, and any late or foreclosure charges. There are no fees introduced after disbursal, no bundled insurance you can’t opt out of, and no maintenance charges.
The processing fee is a percentage of the sanctioned loan amount, in line with regulated NBFC market practice. It’s deducted from your disbursal, and 18 percent GST is added on top per Government of India rules. The exact percentage that applies to your loan is displayed on your Key Fact Statement before you accept.
The sanctioned amount is the loan value on paper, which is what you owe and pay EMIs on. The disbursal amount is what actually lands in your bank account after the processing fee and GST are deducted. On a ₹50,000 sanctioned loan with a 3 percent fee, the disbursal is ₹48,230, and the EMI is still calculated on the ₹50,000.
If you miss an EMI, a late fee and penal interest apply, both spelled out on your Key Fact Statement. If you want to close the loan early, prepayment or foreclosure terms are also on the KFS. There are no surprise penalties, and every applicable charge is disclosed before you sign the agreement.
