Loans happen to be one of the best financial tools that can be used at the time of need. Online Personal loans are one of the most availed loans in the current scenario to meet individual needs. Availing personal loans takes very less time as compared to any other loan and requires very less documentation. In this article, you will come to know about various charges that are associated.
Associated Charges
At the time of loan processing and disbursement, there are a certain amount of expenses that the customer needs to pay.
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Processing Fees
Banks and financial institutions charge a certain percentage of the total amount of loan applied as processing fees. The amount of processing fees is minimal and often lies in between 0.5% to 2.5% of the total loan amount applied. These charges vary from bank to bank. There are specific ways of paying the processing fees. One can straightaway pay the fees or else you can ask the bank to deduct the processing fees from the loan amount at the time of disbursement.
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Verification Charges
When you apply for a personal loan, the bank assesses your background to make sure whether you will be able to pay back the total amount along with the chargeable interest. To carry out this process, banks and financial institutions always hire third-party agencies to carry out a proper survey. These verification agents conduct a detailed study related to the credentials along with the past repayment history and credit score. The cost incurred for verification needs to be paid by the customer who is applying for a personal loan.
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GST
After the implementation of goods and services tax by the government of India, the customers are liable to pay a certain fee GST. This is often a minimal amount.
These charges are payable at the time of loan processing. To get a clear picture of the total expenses that you need to pay at the time of loan processing, then you can calculate it with the help of a personal loan calculator. There are specific fees that are applicable in the course of repayment. They are as follows:
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Penalty on Late Payment
Once you have availed a loan from a bank or any other financial institution, then you have to pay back in terms of monthly instalments. The borrower should make sure that the EMI’s are always paid on time. If the proper repayment pattern is not followed, then the bank will levy a certain amount of penalty. It is highly recommended to calculate and ascertain the amount that you would be able to pay back to the bank at the end of every month.
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Penalty for Prepayment
If you want to pay back the principal and interest before the completion of the tenure allocated for the repayment of the personal loan, then the bank will charge a certain amount of penalty. This is for the reason that, if you pay before the tenure, then the bank will incur a loss. The bank will charge a certain amount of fee to make up for the loss. The penalty charges vary in between 2% to 4% of the total loan amount.
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Duplicate Statement
If you want to get a duplicate statement of the schedule of the loan repayment and outstanding personal loan amount, then the bank will charge a certain amount of fee. These charges are very minimal and are often in the range of 200 INR to 500 INR. It keeps on varying from bank to bank.
It is highly recommended to be well versed with all the bells and whistles associated with personal loan processing and loan repayment. If you can afford to pay back, then you can easily opt for one.
Read Also:Â Advantages of Personal Loan
