Planning To Take A Personal Loan? 5 Important Charges You Need To Know Of

Loan processing fee is the basic charge that has been levied on a borrower by the bank in order to process a loan application. These charges may include fees for application processing, documentation, credit appraisal, legal verification, and administrative expenses.

Verification charges on personal loans refer to the one-time fee that a lender may charge for verifying the personal and financial information provided by the borrower in the loan application. If you're considering a personal loan, it's essential to compare the interest rates and fees charged by different lenders to find the best deal.

The borrower as per its ability sets up quarterly/Yearly EMI on the personal loan at the start with the agreement with the lender. Defaulting on EMI may attract a penalty, as per the agreement. It’s better to choose an EMI that you can afford.

A minor fee in the form of GST tax will be levied on the borrower against the services. The borrower will incur during the loan approval or repayment period.

Prepayment or foreclosure penalty is a fee that a borrower has to pay to a lender for repaying a loan before its due date. The penalty amount may vary depending on the type of loan, the outstanding loan amount, and the time left for the loan repayment. It's important to read the loan agreement carefully and understand the prepayment or foreclosure penalty terms before taking a loan.