Personal Loan fees
Personal loans are one of the prime financial tools that can be utilized by an individual to meet his/her expenses. Moreover, it is not only about the interest which is charged on the loan amount. There are certain other fees which must be taken into consideration.
Therefore, it is vital to ascertain the affordability or the overall cost of a loan only after seeking the fees as well as the charges that are associated with it.
Usual charges Related to Personal Loan
The personal loan and fees charges which are related to various personal loans can be enlisted down as follows:
- The Processing charges: At the time of processing a loan, a bank will consist of some cost related to administration. The amount is pretty small as well as often varies between 0.5% and 2.50%. The processing charges for personal loans would be varying from one bank to another. An individual essentially applying for a personal loan can easily choose from paying the processing fee instantly, or having the processing fee deducted from the actual loan amount at the moment of its disbursement.
- The Verification charges: A bank would also substantially have to be assured about numerous loan repayment capacities wherein an individual way before they potentially disburse the loan. For verification, the bank accordingly hires an agency which is considered a third party for verifying the credentials. Such agents check the credit scores as well as credit repayment patterns of a certain individual who has applied for the loan. Furthermore, This extra cost incurred on the part of the bank for the aim of verification is known as the verification charge. This kind of charge has to be borne by the applicant of the loan because it is an additional cost for the bank.
- The Goods and Services Tax: in addition to services that are required by the loan applicant throughout the sanction of a loan or during a certain period of repayment of the loan, a small fee has to be borne by a person who is against the service in the form of Goods as well as Services Tax or called GST.
- Any kind of penalty on various late payments of EMIs such as defaults: if an individual opts for any sort of loan, he/she must be required to repay the loan amount in the form of EMIs or equated monthly installments. It is the sole responsibility of the borrower to ensure that the EMIs are paid on a definite time. Defaulting the payment of an EMI would automatically attract a penalty. Therefore, it is vital to calculate the EMI amount in advance and plan the finances as well as the tenure for the loan accordingly.
- Various Penalty for prepayment or foreclosure of loan: Foreclosure of a loan stands for the repayment of the loan amount before the stipulated tenure of the loan. Paying off the debt before time might cause the bank to sustain a loss. To make up for the loss, the bank has to charge a penalty for the prepayment. This kind of penalty is casually charged at the rate of about 2% to 4% as well as varies from one bank to another.
Fees for duplicate statements: A bank might always charge a fee for generating a duplicate statement of the schedule of payment as well as a great balance of the loan. This fee generally ranges between Rs.200 and Rs.500. This fee also varies from one bank to another.
