Cooling-off Period & Loan Cancellation
Your right to exit a digital personal loan within the look-up period — what you pay and how to do it.
Updated 27 September 2026 · 8 lenders trackedWhat you need to know
RBI’s Digital Lending Directions, 2025 (8 May 2025) give every digital loan a cooling-off or look-up period set by the lender’s board — at least 1 day. During it you can exit by repaying the principal and the proportionate APR for the days you held the money, with no penalty. The lender may retain only a reasonable one-time processing fee if it was disclosed.
What exiting costs
| Exit after | Principal | Proportionate APR cost | Total to repay |
|---|---|---|---|
| 1 day | ₹2,00,000 | ₹77 | ₹2,00,077 |
| 3 days | ₹2,00,000 | ₹230 | ₹2,00,230 |
| 7 days | ₹2,00,000 | ₹537 | ₹2,00,537 |
| 15 days | ₹2,00,000 | ₹1,151 | ₹2,01,151 |
₹2,00,000 loan with a 14% APR. A disclosed one-time processing fee may be retained by the lender. Days beyond the lender’s look-up period may attract its normal foreclosure terms.
How to cancel
- Check the look-up periodIt is in your KFS and loan agreement.
- Tell the lender in writingThrough the app, email or branch, within the period.
- Repay principal + proportionate APRPay directly to the lender’s account.
- Get a closure confirmationAnd check the account is reported closed.
Bank practice
- ICICI Bank: free cancellation within the cooling-off period; ₹2,500 afterwards.
- After the look-up period, normal foreclosure terms apply.
Frequently asked questions
Does the cooling-off period apply to branch loans?
The RBI rule applies to digital loans. Many banks also allow cancellation of branch loans under their own policies — check the KFS.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.