Personal Loan Processing Fees And Charges

What are Personal Loan Fees and Charges?

Understanding Personal Loan fees and charges is crucial when planning your finances. These costs include the processing fee for a Personal Loan application, which cover the initial administrative expenses. Personal Loan charges may include late payment penalties or prepayment fees. Explore our Personal Loan options today and find the perfect solution for your financial interest rates, fees, and charges.

We strongly recommend reviewing all fees and charges to accurately assess the total cost of your loan.

List of all fees and charges

Detailed Personal Loan Fees & Charges Breakdown

*Terms & Conditions Apply. All actual charges will be as per Key Fact Statement (KFS) shared by the company.

Impact of Late Payment Charges on Your Loan

Rates and examples Our Penal Charge/Late Payment Charge (LPC) is 2% (p.m.) on the EMI overdue + applicable taxes. For example, if your EMI is ₹10,000 and you miss the due date, you will incur a late payment charge of ₹200 plus taxes for that month. This is a compounding charge, applied monthly until the overdue EMI is cleared.

Credit score impact Missing an EMI payment is reported to credit bureaus (like CIBIL) and will severely impact your credit score. A lower credit score can make it difficult or more expensive to secure future loans, including home loans or credit cards.

Prepayment and Foreclosure Charges Explained

When applicable Foreclosure charges are applicable when you pay off the entire principal outstanding amount before the scheduled loan tenure ends. Part Payment charges are applicable when you pay only a portion of the outstanding principal amount prematurely.

Calculation examples Our foreclosure charge is 5% of the principal outstanding + applicable taxes. If your remaining principal is ₹5,00,000, the foreclosure charge would be ₹25,000 plus taxes. Always check your loan agreement as some lenders may allow part payment after a lock-in period, or offer nil charges under certain conditions.

GST and Taxes on Personal Loan Fees

Applicable fees attracting GST In India, the Goods and Services Tax (GST) is applicable on most services provided by financial institutions, including the personal loan processing fees, late payment charges, bounce charges, prepayment penalties, and foreclosure charges.

Recent GST updates (effective dates) Our current Penal Charge/Late Payment Charge (LPC) has applicable taxes levied on it w.e.f. 1st Apr'24. The current applicable GST rate will be added to the fee amount stated in the detailed charges table.

How are Processing Fees for Personal Loans Calculated?

The processing fees for Personal Loans are determined as a percentage of the total loan amount, typically ranging from 1% to 3%. This fee compensates the lender for administrative work associated with loan approval and disbursement. For instance, if you secure a ₹ 10 Lakh loan with a 2% fee, your processing charge would be ₹ 20,000. While seemingly simple, understanding this calculation is crucial, as it adds to the initial cost of borrowing. Additionally, borrowers must consider Personal Loan EMI late payment charges and other personal loan fees and charges, which can further impact the financial landscape of the loan. An informed approach ensures borrowers can manage their obligations efficiently, minimising unexpected expenses.