Billing Cycle: Meaning, Payment Cycle Differences, and RBI Guidelines Explained

A billing cycle refers to the period between two consecutive billing statement dates. It is the timeframe during which all transactions, such as purchases, payments, and fees, are recorded. For example, if your billing cycle starts on the 1st of a month and ends on the 30th, all transactions made during this period will reflect in your statement generated on the 30th.

Why is the billing cycle important?

Understanding your billing cycle is crucial for effective financial management. Here is why:

• Cash flow management: Knowing your billing cycle helps you plan your expenses and repayments, ensuring you have sufficient funds to cover your dues.
• Interest-free period: For credit cards, the billing cycle determines the interest-free period. For instance, many cards offer up to 50 days of interest-free credit, depending on the transaction date within the billing cycle.
• Credit score impact: Timely payments within the billing cycle can positively impact your credit score, while missed payments could harm it.

By keeping track of your billing cycle, you can make informed financial decisions and avoid unnecessary penalties or interest charges.

The Reserve Bank of India recently introduced a new mandate requiring financial institutions to report credit data on a weekly basis instead of the earlier monthly cycle. This change aims to enhance transparency and provide lenders with more up-to-date information about borrowers’ credit behaviour.

What does this mean for you?

The weekly credit reporting rule has several implications for borrowers:

1. Faster credit score updates: Your credit score will now reflect changes in your credit behaviour more quickly. Timely payments or defaults will be reported within days, not weeks.
2. Improved credit monitoring: With more frequent updates, you can monitor your credit score closely and take corrective actions if needed.
3. Enhanced borrowing opportunities: Lenders can make faster and more accurate decisions based on up-to-date credit information, potentially improving your chances of loan approvals.

How can you stay on top of these changes?

To adapt to the new weekly reporting system, consider the following steps:

• Set payment reminders: Ensure your payments are made well before the due date to avoid negative reports.
• Monitor your credit score: Regularly check your credit score using trusted platforms to stay informed about changes.
• Utilise Bajaj Finserv’s services: Log in with your registered mobile number to access your account details, statements, and other tools to manage your finances effectively.

Stay on top of your financial goals — download your loan statement here!

If your current billing cycle does not align with your income schedule or financial needs, you may want to consider changing it. Here is a simple step-by-step guide to help you:

1. Review your current billing cycle

Log in to your account via the Bajaj Finserv Service Portal or app to check your existing billing cycle. Take note of the start and end dates, as well as the due date for payments.

2. Assess your cash flow

Evaluate your income and expense patterns to determine a billing cycle that aligns better with your financial situation. For instance, if you receive your salary on the 7th of every month, a billing cycle that ends around the 10th might work better for you.

3. Contact customer service

Reach out to Bajaj Finserv’s customer service team to request a change in your billing cycle. You can do this through the Service Portal or app.

4. Confirm the changes

Once the request is processed, confirm the new billing cycle details and ensure they are updated in your account.

5. Plan your payments

Adjust your payment schedule to align with the new billing cycle. Set up automatic reminders to ensure you never miss a due date.

Only 2 steps to get your statement — Login with your registered mobile number now!