Personal Loan Processing fee and Charges
31 Oct 2022
Table of Content
Loans are backbones that offer a financial equilibrium. As India prepares to enter the festival season, it's time to amp your finances. Spendings are on an upward spiral from September to December for almost all families across the nation. Indian festivals are elaborate and expensive, but if you have your financial goals sorted, getting a loan should not be a problem. While saving for the festival every month is a great idea, it may not be sufficient. So some manage their festival season’s financial overheads with loans quite effectively. Learn more about the nuances of personal loan processing fees and personal loan process steps (PLPS). This complete insight will make loan procurement a more informed exercise.
What Is a Processing Fee for Personal Loan?
If you are a rookie availing of loans, even a bit of knowledge can make your loaning experience easy. No service in this world is free, so personal loans without processing fees do not exist. Loans come at a cost, other than the interest paid on them. A personal loan processing fee is a charge levied on loans for a reason. It is a percentage amount charged by the lender from the borrower on the loan to cover the administrative cost for the application of the personal loan process. The processing fee may differ depending on the institute disbursing the loan. On special occasions, banks and NBFCs waiver the processing fee for increased availability, however, if you choose to loan from PSU Banks, the processing fee is considerably reduced compared to private banks.
How Are Processing Fees Charged?
Let's look at a situation where you are purchasing a home on loan. The personal loan process steps will involve an equated monthly instalment (EMI) which will include various charges that come with the loan along with the principal amount for the home loan. Some lenders group charges while others treat them separately. These can be fixed amounts, or a percentage is charged on the loan amount as the personal loan processing fee.
Fees And Charges on Your Personal Loan
Just as you are about to compare the best option for availing of your loan, here is a comprehensive idea of what the processing fee for personal loans entails.
Application fee
The application fee is charged by the lender at the outset as an initial fee for the evaluation of the loan application. Below is the evaluation of the personal loan process steps:
- If the application is furnished with relevant documents
- If the information in the document is accurate for the next step
- Cost recovery of the manpower assigned for the task
The fee can be charged flat by the lender as a personal loan processing fee or a variable fee on the personal loan process.
Technical fee
This personal loan processing fee is levied on the borrower by the lender as an assessment fee for inspection and assessment of market value.
Legal fee
For any personal loan, the lender needs to establish if the loan seeker is involved in any legal dispute. For this, a legal expert is hired to scrutinize documents. This legal fee is deducted from the personal loan processing fee.
Statutory loan charges
The lender collects statutory charges from the borrower on behalf of a regulatory body such as the government like the GST charges.
Pre EMI
Once the loan is disbursed, the procurement process can be delayed. However, the lender will start charging a simple interest known as pre-EMI till the loan amount is realised.
Loan Re-appraisal fee
In some cases, borrowers may not take the loan after its sanction and disbursal. If the period stretches for a long time, the loan application is re-evaluated.
Notary fee
This fee is charged from NRIs for additional paperwork as part of the loan processing fee. For documentation notary by the Indian embassy or the local notary of residence. If the individual is a Power of Attorney holder for an NRI, a notarised adjudication in India will be applied which comes at a fee.
Bottomline
Personal loans are the smartest choices when you require extra cash for a special purpose that outstretches your salary. Instead of asking friends and family for financial help, loans provide solvency that helps you beat the cash crunch and gracefully return the money to your debtor through consistent regularity. However, one must not overlook the personal loan processing fee while calculating their loan amount for healthy planning.
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The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
How to Apply for Instant Personal Loan
Making small savings is a sheer way to beat the blues of cash shortage. As the adage goes, a penny saved is a penny earned. However, the saved amount is largely dependent on your income and your ability to keep away from your saving. When unexpected financial troubles loom, instant cash is not always handy, in the words of Martyn Kenny, an instant personal loan will assist you in such conditions. They are an excellent financial deal that is specially planned to assist the borrowers at the time of sudden monetary emergency. To make things simpler, a quick personal loan online is readily available with verification, approval and disbursement managed online. This blog discusses in greater detail how to get an instant personal loan from any bank or financial institution.
Types of Personal Loans in India
Loans fulfil quick cash requirements and are thus anyone’s best financial friend in times of need. With skyrocketing prices and limited income, it's hard to save from your earnings or make short-term financial investments. So, where do you find funds when you need them immediately? Several types of personal loans are first partner of choice for emergencies and money management mantras for smart spenders. Taking loans are not a bad habit if you can repay timely in disciplined manner.
