Personal Loan – Fees & Charges
There are different types of fees and charges applied in the entire process of taking a personal loan from the lender. These charges are additional to the interest charged on the loan. Some of the charges are applied prior to the loan disbursement or during the loan period and when you end the loan. You should be aware of these charges before hand so that it will not come to you as a surprise later on. You should also carefully understand the terms and conditions, when these charges are applied and how you can prevent some of these charges by making the repayment on time.
Processing fee – It is basically the amount charged by the lenders for covering the processing costs of your loan application. The processing fees changes from one lender to other. It is generally calculated as a percentage of the loan amount and it comes between 1% to 2% of personal loans. There are some banks that levy a flat fee of Rs 1000 or Rs 2000 directly, and then subtract the balance processing fee from the loan amount prior to its disbursal. The processing fee is collected directly with your loan application along with supporting documents.
Pre-payment fee – This fee is calculated as a penalty paid by the borrower to the lender in case a borrower pays back the personal loan prior to the end of the loan. The pre-payment fees are calculated as a percentage of the outstanding principal of the loan amount. It differs from 2% to 5% of the outstanding loan amount. The prepayment is permitted only after a certain locking period that is usually 6 months as per the original tenure and sum of the personal loan. In case you make a late payment then there are charges for late fees. As a borrower, you should read the complete documents before taking loans regarding the applicable late fees. It varies from 2% to 3% per cent of the personal loan EMI.
Cheque bounce charges – In case, your cheque gets bounced due to insufficient balance in the account then you need to pay the cheque bounce charges. In case, you have given post-dated cheques for the debit of EMI from your account, then always ensure to keep sufficient funds in the account each month. The charges of a single cheque bounces vary from Rs 250 to Rs 500 as penalties.
Duplicate Statements Charges – The lender usually gives a statement detailing about the repayment schedule when the loan is sanctioned. In case, you lost it, you can request the lender for issuing a duplicate statement which indicates your balance loan amount as well as the remaining EMIs. The banks usually charge between Rs 100 to Rs 500 for the issuing the duplicate statements.
Documentation charges – For the verification of various documents provided by you for the loan application the documentation charges are levied. There are third party vendors employed by various banks that do the document verification. These charges vary from Rs 500 or Rs 1000.
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