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Personal Loan Processing Fee and Charges

Top Bank Personal Loan Fees and Charges in 2021: Details

Last Updated 27th Nov 2021

  • Personal loan charges include loan processing fees, part payment charges, foreclosure charges, penalty on the late payment.
  • A personal loan processing fee is a one-time fee charged on the loan amount to process the loan application.
Bank Processing Fee Foreclosure Charges
ICICI Bank Upto 2.25% of Loan Amount 5%
HDFC Bank Upto 2.50% Min ₹ 999 2 - 4%
Kotak Bank Starting from Rs.999 Starting from Rs.999
Axis Bank Rs.4,999 For Loan Amt Approved of 10 Lacs and above-- 0% FC charges after 12 EMIs if closure through OWN FUNDS,1-12 EMI-5%, 13-24 EMI-4%, 25-36 EMI-3% & Above 36 EMI-2%
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Personal Loan Processing Fees and Charges - Overview

A personal loan is an unsecured loan that you can avail for unforeseen financial emergencies including expenses for marriage, health, travel, home renovation etc. The rate of interest on a personal loan is usually high, and as per the current rates, it starts at 10.25%. However, apart from the interest rate, there are various other charges that affect the costs of a personal loan. Processing Fee on a personal loan is one such cost which is related to the administration of a lender paid by personal loan borrowers to process and sanction loans. It is charged on the principal loan amount and varies across lenders. Along with that, banks and non-banking financial institutions also charge various other fees and charges on a personal loan including prepayment and foreclosure charges, valuation charges, penalties on late payment, goods & and services tax etc. Furthermore, few lenders may have zero processing fee personal loan, especially during festival seasons like Dussehra and Diwali.

Personal Loan Processing Fees and Charges of Top Banks in India

The table below provides the personal loan fees and charges of top banks in the country.

Bank Processing Fee Part Payment Charges Foreclosure Charges
SBI Nil Not Allowed Not Allowed
HDFC Bank Upto 2.50% Min ₹ 999 Not Allowed Not Allowed
ICICI Bank Upto 2.25% of Loan Amount Not Allowed Not Allowed
Bajaj Finserv Starting from 1.50%, Up to 3% Allowed at 2% Allowed at 4%
IDFC First Bank Upto 2.00% Not Allowed Not Allowed
Axis Bank Rs.4,999 Allowed at 1-12 EMI-5%, 13-24 EMI-4%, 25-36 EMI-3% & Above 36 EMI-2% Allowed at For Loan Amt Approved of 10 Lacs and above-- 0% FC charges after 12 EMIs if closure through OWN FUNDS,1-12 EMI-5%, 13-24 EMI-4%, 25-36 EMI-3% & Above 36 EMI-2%
Tata Capital Upto 2.50% of Loan Amount Not Allowed Not Allowed
Fullerton India 2% Not Allowed Not Allowed
IndusInd Bank Min 0.75% to Max 1.75% Not Allowed Not Allowed
Kotak Bank Starting from Rs.999 Not Allowed Not Allowed

Common Personal Loan Fees and Charges

The common charges on a personal loan are explained in the paragraph below:

  • Processing Fee: The processing fee on a personal loan is a one-time fee charged on the loan amount that may range between ₹ 999 to upto 2%. It varies from bank to bank and can be negotiated depending on your eligibility and relationship with the lender. However , you may not get an instant loan without processing fees.
  • Verification Charges: The verification costs are the charges that are passed by the lenders to the borrowers for verifying the repayment capacity of the borrower. It includes expenses related to hiring a third-party agent for checking the credit scores and credit history of the borrower.
  • Goods & Services Tax: Lenders also charge a small fee for any additional service that the borrower avails when sanctioning or repaying the loans. This fee is charged as a goods & service tax (GST). On all banking services, a GST rate of 18% is applicable from July 1 2017.
  • Part Payment & Foreclosure Charges: If a borrower decides to prepay or close the loan account before the predetermined loan tenure, they have to bear fees for prepayment and foreclosure. Banks typically levy prepayment or foreclosure charges on personal loans that can range from Nil to up to 6% of the outstanding balance.
  • Duplicate Statement Fees:The bank charges the duplicate statement fees for providing a duplicate physical copy of the statement of the schedule of payment or outstanding balance of loan amount for more than the specified number of times. This may vary from bank to bank.

FAQs

What is the processing fee for a personal loan?

A processing fee on a personal loan is a one-time fee charged on the principal amount of loan amount for processing and sanctioning of loans. It varies from bank to bank and may cost upto 2% of the loan amount.

What is SBI personal loan processing fee?

State Bank of India charges a processing fee of Nil. For defence pensioners, SBI, however, does not charge any fees for processing of a loan.

How is the processing fee calculated?

Banks charge a certain percentage of the principal amount of loans as a processing fee. You can calculate the processing fees as per the processing charge of your bank and loan amount.

What are the hidden charges in a personal loan?

Hidden charges in a personal loan include charges for late payment, part payment/foreclosure of personal loan, Goods and Service tax, duplicate statement fees etc.

Do lenders charge any additional fee on a personal loan?

Apart from interest rate on personal loan, lenders also charge processing fees, preclosure charges, prepayment charges, verification charges, duplicate statement charges and GST

What are the processing fees and charges of HDFC bank?

If you avail a personal loan from a HDFC Bank, then HDFC levies a personal loan processing fee. HDFC personal loan processing fees range up to 2.50%.

Is there anything like a zero processing fees personal loan?

Generally, banks charge processing fees on personal loans. However, there can be a time when banks offer zero processing fee personal loan. During festival season few lenders waive off the processing fees.

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