The lender levies some other charges than just the rate of interest which also add up into your overall cost of loan. These are as follows:
- Processing Fee: This fee is charged by the banks to process the loan of the borrowers, which usually is 1-2 percent of the total amount borrowed and are mostly subject to a minimum flat amount.
- Pre-payment Fee: Banks may also charge borrowers a fee if they repay the loan before the completion of the tenure of the loan. This fees can range anywhere between 2-5 percent of the amount being prepaid.
- Late fee charge: When borrower fails to pay the EMI on time, the lender charges a penalty amount along with the EMI, which ranges usually between2-5 percent of the loan amount.
Documentation Charges: This fee is charged for the processing of the application for the loan and is around `500 to ` 1000.