Question: Anita took a digital loan of Rs 1,20,000 carrying an Annual Percentage Rate ( APR) of 15%. The loan was disbursed on 1st of August, but she decided to exit the loan during the applicable cooling- off period after 12 days. The lender does not charge any processing fee for loans closed during the cooling-off period. As per the RBI Digital Lending Directions, how much should Anita pay to exit the loan during the cooling-off period?
Answer: During the cooling-off period, the borrower is required to repay the principal along with the proportionate APR, without any penalty.
Principal = Rs 1,20,000
APR = 15% per annum
Interest for 12 days = Rs 591.78
Therefore the toatl amount payable is :
Rs 1,20,000+ Rs 591.78 = Rs 1,20,591.78
Therefore, Anita should pay Rs 1,20,591.78 to exit the loan.

Supporting evidence:
title: axis.bank.in/reserve-bank-of-india-digital-lending-directions2025.pdf
quote: The borrower shall be given an explicit option to exit a digital loan by paying the principal and the proportionate APR without any penalty during an initial 'coolingoff period RE may retain a reasonable one-time processing fee, if the customer exits the loan during the cooling-off period. This, if applicable, shall be disclosed to the customer upfront in KFS
context: s in cash, wherever necessary. In order to afford operational flexibility to RE, such transactions are exempted from the requirement of direct repayment of loan in the RE's bank account. However, any recovery by cash shall be duly reflected in full in the borrower's account on the same day and RE shall ensure that any fees, charges, etc., payable to LSPs for such recovery are paid directly by the RE and are not charged by LSP to the borrower either directly or indirectly from the recovery proceeds.

10. Cooling-off period

- i. The borrower shall be given an explicit option to exit a digital loan by paying the principal and the proportionate APR without any penalty during an initial 'coolingoff period'. The cooling off period shall be determined by the Board of the RE as laid down in their loan policy, subject to the period so determined not being less than one day. For borrower continuing with the loan even after cooling-off period, pre-payment shall continue to be allowed as per applicable RBI guidelines 8 .
- ii. RE may retain a reasonable one-time processing fee, if the customer exits the loan during the cooling-off period. This, if applicable, shall be disclosed to the customer upfront in KFS.

11. Grievance redressal

- i. The RE, and the LSP which has an interface with the borrower, shall designate nodal grievance redressal officers to deal with digital lending related complaints/ issues raised by the borrower.
8 In terms of Circular DBR.Dir.BC.No.08/13.03.00/2019-20 'Levy of Foreclosure Charges /Pre-payment Penalty on Floating Rate Term Loans' dated August 02, 2019 for banks and Master Direction - Reserve Bank of India (NonBanking Financial Company - Scale Based Regulation) Directions, 2023 dated October 19, 2023 for NBFCs, as amended from time to time, and other relevant instructions as issued from time to time.
- ii. Contact details of the nodal grievance redressal officers shall be prominently displayed on the websites of the RE, its LSP and on the DLA, as well as in the KFS provided to the borrower.
- iii. The facility of lodging complaint shall also be made available on the DLA and on the website as stated above. It is reiterated that responsibility of grievance redressal shall continue to remain with the RE.
- iv. If any complaint lodged by the borrower against the RE or the LSP engaged by the RE is rejected wholly or partly by the RE, or the borrower is not satisfied with the reply; or the borrower has not received any reply within 30 days o