Under the RBI (Digital Lending) Directions, 2025, the cooling-off period for a loan app in India must be not less than one day. There is no single number beyond that floor: each regulated lender’s board fixes the length in its loan policy, and a borrower who exits inside it pays the principal and the proportionate APR, with no penalty.
That is the whole answer to how many days the cooling-off period for a loan app in India runs, and it is shorter than the pages on the subject we could open admit. This is an evergreen assessment of the rule as it stands, not a news item: the Directions are dated May 8, 2025 and came into force immediately, except two paragraphs on multi-lender arrangements and the DLA directory that carried later dates. We read para 10 of the Directions on the RBI’s own site on 11 September 2026, and this piece reads it to you rather than paraphrasing a lender’s blog.
How many days is the cooling-off period for a loan app in India?
Three things in that table do the work. The floor is flat: one day, with no tenure split. The length is a board decision, which is why the question has no single answer and why any page giving you one figure for “loan apps” is guessing. And the exit price is defined, which turns a vague right into arithmetic.
Why you keep reading “three days for loans over seven days”
Because that wording dates from the earlier rule, and it is now a different rule. The Guidelines on Digital Lending of September 2, 2022, now marked repealed on the RBI’s own site, carried in their para 8 a mandatory minimum number of days for the post-sanction cooling-off period. The RBI’s Key Facts Statement circular of April 15, 2024, which we also read on 11 September 2026, partially modified that paragraph in its first footnote to the wording now in para 10: board-determined, not less than one day. The 2025 Directions consolidated the digital lending instructions and list the 2022 Guidelines among the circulars they repeal.
A three-day and one-day split does exist in the current rules, but elsewhere. Para 5 of the KFS circular gives the KFS itself a validity period of at least three working days for loans with a tenor of seven days or more, and one working day for shorter loans. That is the time a prospective borrower has to accept the terms before signing, and the lender is bound by the KFS if the borrower agrees within it. It is a pre-acceptance window, not an exit right, and the two are easy to run together. The stripped text of the 2025 Directions, searched on 11 September 2026, contains no “three days” or “seven days” wording at all.
Does the right depend on whose logo is on the app?
No, provided a covered lender is behind it. Para 3 applies the Directions to the digital lending of all commercial banks, primary urban and state and central co-operative banks, all NBFCs including housing finance companies, and All-India Financial Institutions. Para 4(iv) defines Digital Lending Apps to include both the regulated entity’s own applications and those operated by a Lending Service Provider it engages, and para 4(v) defines the LSP as the regulated entity’s agent. The exit option in para 10 is a duty of the regulated entity, so an app that is only a marketing front for a bank or NBFC carries that lender’s cooling-off policy. Which lender that is remains the borrower’s job to establish, and we set out how in our assessment of the DLA directory against the NBFC register. An app with no regulated entity behind it is outside the Directions entirely, and nothing in this piece applies to it.
What exit costs, worked through
The Directions do not publish a rate, and neither does any lender in this piece, so treat the following as arithmetic on the rule at a hypothetical, labelled APR and not as what anyone charges. Take a Rs 20,000 loan with a 90-day tenor, returned on day two, at an assumed all-in APR of 36 per cent. Proportionate APR for two days is 20,000 multiplied by 0.36 multiplied by 2/365, which is about Rs 39. The borrower repays Rs 20,000 plus roughly Rs 39, plus whatever one-time processing fee the KFS disclosed before acceptance, and no penalty. At a higher APR the interest line scales in proportion; at any APR, a fee that was not in the KFS is one para 8 of the KFS circular says cannot be charged without the borrower’s explicit consent.
What to check on the KFS before you accept
The KFS is the document we assessed last month as the strongest consumer tool in this market, and on this question it earns that description in one specific way: para 10(ii) requires the retainable exit fee to be disclosed there upfront. Read the fee lines for a one-time processing fee and note its size before you accept. The Directions themselves do not set out the KFS rows; that format is annexed to the April 2024 circular, and the annex did not render to this desk’s plain fetch, so we do not say here which row carries the period. Look for it on the statement, and if it is not there, ask the lender to confirm the period in writing before you accept. And if an app refuses an exit the rule allows, para 11(iv) gives the route: a complaint to the lender first, and if it is rejected or unanswered within 30 days, the RBI’s Complaint Management System under the Integrated Ombudsman Scheme, which we have covered alongside the NBFC Internal Ombudsman.
Pros and cons
Verdict
The questions people ask
What is the cooling-off period for digital loans in India? It is the initial window after a digital loan is taken during which the borrower has an explicit option to exit by paying the principal and the proportionate APR, with no penalty. Para 10 of the RBI (Digital Lending) Directions, 2025 sets a floor of not less than one day and leaves the actual length to the Board of the regulated lender, as laid down in its loan policy.
Can I cancel a loan app loan after disbursement? Yes, within the cooling-off period, if the loan comes from a regulated entity covered by the Directions: a bank, a co-operative bank, an NBFC or an All-India Financial Institution. Para 10(i) requires an explicit exit option. After the period ends, exit becomes pre-payment, which the Directions say continues to be allowed under the applicable RBI guidelines rather than under the cooling-off rule.
Do I have to pay interest if I return a loan during the cooling-off period? You pay the proportionate APR for the days the money was with you, and the principal, and nothing by way of penalty. The lender may also retain a reasonable one-time processing fee, but para 10(ii) says that fee, if applicable, must have been disclosed upfront in the Key Facts Statement. A fee that is not in the KFS is not one the rule lets the lender keep.
Is the cooling-off period the same for every loan app? No. The Directions fix only the floor of one day. The length itself is determined by the Board of each regulated lender in its loan policy, so two apps can lawfully offer different periods, and an app fronted by a lending service provider follows the policy of the lender behind it, not its own. The only way to know a specific app’s period is to read that lender’s KFS and loan terms.
Our assessment is that para 10 is a better-drafted right than the market’s summaries of it. It names a price, forbids a penalty, and pins the one fee it allows to a document the borrower already holds. What it declines to do is name a number of days, and a borrower should not let a blog do that for the lender. Whether the entity behind an app is a regulated lender at all is a separate question, answered by the RBI’s own registers and not by a badge in the app; we assert no firm’s status here, and neither should an app.