Personal Loan Charges India
Charges involved in Unsecured Loan
The Rate of interest alone should not be judged before you finalize your application, apart from the rate of interest, Personal Loan also constitutes other charges levied by the lender which affect the overall cost of your loan & should be considered while comparing it across banks. Following are the lists of charges:
• Processing fee : It is a fee charged by banks from the borrowers to process their loan application; it is normally between 1-2 percentage of the loan amount.
• Prepayment fee: Banks charge borrowers with a fee when they pay the loan EMIs before the tenure which normally is between 2-5% of the outstanding loan amount.
• Late penalties: When there is a delay in paying your monthly EMIs of your loan, banks charge a late payment fee with your EMIs. They normally range from 2-3% of the EMI.
• Cheque bounce charges: Banks charge between Rs. 250-500 for every bounced cheque given for the payment of the loan amount owing to the insufficient funds in your account.
• Documentation charges: These are the charges for verifying the borrower’s documents to processing the loan application. These vary from Rs. 500-Rs. 1000.
• You should note that the above charges vary across different banks; you should consider these charges before choosing the loan as they will determine its real costs.
