What Is a Home Improvement Loan? Features, Benefits and Eligibility
Aug 14, 2026 | 4 mins read
Planning to apply for a home loan? As a regulated NBFC, L&T Finance believes in total transparency. It's crucial to understand the home loan fees and charges before signing your agreement. This page provides an expert overview of what you might encounter, from standard processing charges to potential home loan hidden charges. Our breakdown helps you calculate your total cost of borrowing effectively by using the mandatory Key Fact Statement (KFS) as mandated by the Reserve Bank of India (RBI).
When evaluating what is processing fee for loan applications, you must look beyond the initial cost. Per the RBI’s Fair Lending Practice guidelines, all loan processing charges must be transparently disclosed upfront in the Key Fact Statement (KFS).
The following rates are indicative. For specific calculations, use a Home loan processing fee calculator.
| Charge Type - Home Loans | Details |
|---|---|
| Processing Fee | Up to 3% of sanctioned amount + applicable taxes |
| Login Fee | Up to Rs.5000 /- (inclusive of applicable taxes) (nonrefundable) |
| EMI Dishonour/Bounce Charge* *A bounce charge is a charge for (i) dishonour of any repayment instrument; or (ii) non-payment of instalment(s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate | As shown in the table below |
| Loan sanction amount (in INR) | Charges in (in INR) |
| < 5 lacs | ₹ 500 |
| 5 – 50 Lacs | ₹ 1000 |
| >50 Lacs – 2 Cr | ₹ 1500 |
| >2 Cr | ₹ 2000 |
| Penal Charge/Late Payment Charge (LPC) | Up to 2% per month (p.m.) on overdue EMI + applicable taxes |
| Annual Maintenance Charges | NA |
| Document retrieval / Duplicate NOC charges | Duplicate NOC (charge is applicable for paper copy post 3 free copies per customer), list of documents, Photo copies of the documents (property & others) Up to Rs.1000/- + applicable taxes |
| Repayment instrument Swap Charges (per swap): | Up to Rs.500/- + applicable taxes (applicable only for branch walk-ins) |
| Asset valuation and verification fee | Up to 1% of loan amount + applicable taxes |
| Documentation and repayment setup fee | Up to Rs. 2,000/- + applicable taxes |
| Interest conversion fee | Floating interest rate to floating interest rate: 0.5% of balance Loan Amt. or Rs. 10,000/- whichever is higher + applicable taxes Floating interest rate to a fixed interest rate and vice versa: 1% of balance Loan Amt. or Rs. 10,000/- whichever is higher + applicable taxes |
| Charges incurred by LTF for initiating action under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 | Issue of Loan Recall Notice = Up to Rs. 500/ – Issue of Demand Notice = Up to Rs. 1,000/ – Issue of Possession Notice = Up to Rs. 2,000/ – Applying District Magistrate Order = Up to Rs. 8,000/ - Taking Physical possession. Up to Rs. 20,000/ – Actual cost incurred will be debited for expenses pertaining to Publication of Possession Notice / Publication Demand Notice / Publication of Sale cum Auction Notice. All applicable taxes will be added. |
| Loan Cancellation Charges | Up to Rs. 5000/ – + applicable taxes |
| Foreclosure / Full Prepayment Charges – Home Loan | For Individual / Non-Individual Borrowers – |
| Floating Rate – Nil Charge | |
| Fixed Interest Rate – i. Less than 1 year from disbursement – Up to 3% on principal outstanding + applicable taxes ii. Post 1 year of disbursement – Up to 2% on principal outstanding + applicable taxes | |
| Pre-payment Charges – Home Loan | For Individual / Non-Individual Borrowers – |
| Floating Rate – Nil Charge | |
| Fixed Interest Rate – i. Less than 1 year from disbursement – Up to 3% on Partial / Prepayment amount + applicable taxes ii. Post 1 year of disbursement – Up to 2% on Partial / Prepayment amount + applicable taxes | |
| Non-compliance fee | Up to 1% of principal outstanding + applicable taxes |
| Field collection service fee | Up to Rs. 500/- per collection + applicable taxes |
| Legal fees and charges | As per actuals or Up to Rs. 50,000/- whichever is lower + applicable taxes |
| Recovery charges | As per actuals or Up to Rs. 1,00,000/- whichever is lower + applicable taxes |
| Auction fees | Up to 1% of auction sale amount + applicable taxes |
