What is the Processing fee for Personal Loan? Overview
Personal Loan Fees and Charges
To meet your financial requirements the Personal loan is one of the best way that a person can use. Albeit, the meaning of personal loan is not just about the interest that will be taken on the loan amount. There are some many different fees and charges that should be taken into account.
There are certain other charges that should be taken into account by the every borrower before taking a loan.
It is too important to find out the affordability & entire cost of the loan only after thoroughly assuming the affiliated fees and charges.
Some other Common Charges and Fees Related to Personal Loan:-
Processing Fees: the bank will bear certain costs related to administration, while processing your loan. This amount is quite small and frequently different between 0.5% and 2.50%. For a personal Loan the processing fee will always different from bank to bank.
Verification charges: Before disbursement of loan the bank usually verify the past history of the borrower. For the purpose of verification, the bank usually hires an agency (third party) to verify the credentials. These agents check the credit score and credit repayment pattern of the borrower. This additional expenditure incurred by the bank for the purpose of verification is known as verification fee.
Penalty for prepayment or foreclosure of loan:
The foreclosure of the loan is only for the tender payment of the loan amount before the decided period of the loan. Premature repayment of loan can result in loss to the bank. To compensate for the loss, the bank may impose a penalty for the prepayment. Usually this penalty is charged at a rate of 2% to 4% and they are different from bank to bank.
Penalty on late payment of EMIs (defaults): When a person opts for a loan, he needs to repay the loan amount in the form of EMIs or equated monthly installments. It is the borrower's responsibility to ensure that EMIs are paid on time to time. Default in payment of EMIs will attract penalty.
That is why it is necessary to calculate the amount of your EMI in advance and decide the finances according to your tenure.
An individual applying for a personal loan can choose to:
(I) pay the processing fee immediately, or
(II) deduct the processing fee from the actual loan amount at the time of its disbursement.
Processing fee is taken by all the banks and NBFCs, but that is dependent on the basis of their terms & conditions. Usually processing fee is different from bank to bank or NBFCs.
So, whenever you are going to apply for personal loan aware from all the other charges and fees taken by banks.
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