Interest Rate Policy

01 Basis for Interest Rate Policy

ALLEN'S HOUSING FINANCE LIMITED is a registered Financial Services Company providing short to medium term financing to individuals, manufacturing concerns and wholesale traders in PAN India. ALLEN'S HOUSING FINANCE LIMITED is an impact focused Non-Banking Financial Company (NBFC). Our loan products would broadly be in the form of:

• Corporate & MSME Loan (Manufacturing & Other Related Unit)
• Retail Business Loan
• LAP (Loan against Property)
• PL (Personal Loan)

We will make the following assessments while determining interest rate and other costs to our clients.

02 Loan Tenor

The interest rate charge will depend on the term of the loan; structure of the loan; terms of payment of interest (viz. monthly, quarterly, yearly repayment); terms of repayment of principal (viz. monthly, quarterly, yearly repayment, bullet); moratorium period etc.

03 Borrowing Source, Structure and the Associated Costs

The overall cost of funds shall be the weighted average cost of our aggregate borrowings from domestic sources. This will include all costs associated with these borrowings after taking into account the average tenure, refinancing avenues, and interest payment frequency (monthly / quarterly / semi-annual / annual) and structure (fixed or floating) and securities (nature and value) being offered. The pricing factors in the risk associated with these.

04 Operational / Running Cost

The running cost shall include the remuneration to employees, cost of infrastructure, and other administrative costs.

05 Company and/or Sector Specific Risk

Given that our focus is geared towards lending to institutions working in the impact areas there is a perceived risk associated with these companies. However, our risk assessment will consider the structure of loans to these companies, the risk profile associated with each sector of the Borrower Company, history, nature and value of security and overall management assessment etc.

06 Credit Risk

It would be appropriate that bad debt provision / write off cost should be considered for all transactions. This cost is then allocated to the best possible extent in the interest rate offered to a borrower. The amount of the bad debt provision applicable to a particular transaction shall also be based on the internal assessment of the credit strength of the borrower.

07 Margin

There is no fixed profit margin but rather something which is a function of returns to shareholders and the risks involved. The margin is ensured to be sufficient to attract fresh capital to sustain growth.

08 Prevailing Market Practices

While ALLEN'S HOUSING FINANCE LIMITED shall make each loan basis an independent and detailed assessment, its pricing, however, will also depend on the market practices.

09 Interest Rate

• The rate of interest is an extremely flexible component of the business and it's highly likely that a loan offered with the same structure and during the same period to two different companies might not be the same. The commercials of the transaction i.e. interest rate and other charges will vary on a case to case basis and will depend a lot on the factors detailed above.
• The interest rates offered could be on a fixed basis or variable/floating basis with a fixed risk premium over a pre-decided benchmark. Changes in interest rates would be decided at any periodicity, depending on market volatility and competition.
• The interest re-set for floating / variable rate would be decided by ALLEN'S HOUSING FINANCE LIMITED on an annual basis, applying the same decision criteria considered for fixing interest rates. Please note that a critical factor in deciding the interest reset will depend on the movement of the associated benchmark as well.
• Interest would be charged and recovered on a monthly / quarterly / semi-annual / annual basis or as agreed with the Borrower Company in the loan repayment schedule.
• Interest rates along with the EMI apportionment towards interest and principal dues shall be agreed with the Borrower Company at the time of approval / availing of the loan.
• Interest shall be deemed payable immediately on the due date as per the loan repayment schedule, annexed to the loan agreement. Any sanction of grace period for payment of interest is at the sole discretion of the ALLEN'S HOUSING FINANCE LIMITED Credit Committee and the same will be communicated to the Borrower Company in writing.
• Interest rate changes would be prospective in effect and shall be communicated in writing before any such change takes effect and in accordance with the provisions in the loan documents.
• Interest rate, base lending rate, benchmark rates (in case of variable / floating rate) and other charges and their periodic revisions will be made available to the customers, as required.

10 Other Charges

• In addition to normal interest, ALLEN'S HOUSING FINANCE LIMITED may levy additional interest for ad-hoc facilities, penal interest for any delay or default in making payments of any dues. The levy or waiver of these additional or penal interests for the different facilities would be at the sole discretion of the Credit Committee and will be communicated to the Borrower Company in writing.
• Other financial charges like processing fees, cheque bouncing charges, pre-payment / foreclosure charges, part disbursement charges, cheque swaps, cash handling charges, RTGS / other remittance charges, commitment fees, stamp duty, charges on various other services like issuing No Due certificates, No Objection Certificates, letters ceding charge on assets / security, security swap & exchange charges, any report(s) sought by credit bureaus etc. would be levied by ALLEN'S HOUSING FINANCE LIMITED wherever considered necessary.

11 Other Related Issues

• The practices by other lenders would also be taken into consideration while deciding on interest rates / charges.
• In case of disbursements made in tranches, the rate of interest would be subject to review and the same may vary according to the prevailing rate at the time of successive disbursements or as may be decided by ALLEN'S HOUSING FINANCE LIMITED.