Charges in Home Loan
Acquiring a Home Loan doesn’t only involve the cost of home loan interest rates but it also includes other charges & fee accompanying at various stages of taking the Home loan. You must consider all these charges while comparing the cost structure across banks.
Following is the detailed fee structure incurred by banks at different loan stages:
- Processing Charge: It is a fee payable at the time of submitting the loan application to the bank which is normally non-refundable.
- Administrative Fee: It is a fee incurred by banks at the time of loan sanction; there are few banks who have removed this fee so you must check it with all the banks.
- Prepayment Penalties: When the borrower pre-pays the loan before the loan tenure, banks charge a penalty. As per the recent guidelines issued by the RBI there should be no penalty for prepayment, so you should check with your loan issued bank about complete details regarding this.
- Legal Charges: Banks also incur some charges from the customer for legal and technical verification of the property. This includes valuation of your property, at time in a residency the valuation for the property has already been done (some other fellow availed loan for some property in same residency), in that case bank might not consider your case for valuation so you can save some over there. But your case should be near about previous valuation.
- Delayed payment Charges: When there is a delay in the payment of your EMI, banks charge a late payment fee from the borrower.
- Cheque bounce charges: Banks charge between Rs. 250 and Rs. 500 for every bounced cheque towards the loan payment because of lack of funds in your account.