7 essential Personal Loan charges you should keep in mind

A personal loan comes with several fees and charges. It is important for you to be aware of these, so that you can compare loan options and assess their affordability. Doing this exercise also allows you to prepare your finances so that you can be prepared for these charges.

Listed below are the essential personal loan charges you should be aware of:

Interest rate

This is the rate at which you can avail of your personal loan. In other words, the interest is the price at which the funds are provided to you and adds to the overall cost of your loan. This rate will vary from one lender to another and it is worth your while to compare lenders and pick one offering a low interest rate. For example, when you take an instant personal loan from one of India’s leading NBFCs i.e. Bajaj Finserv, you can benefit from a low interest rate, along with features such as a long tenor and easy prepayment terms that make the loan even more attractive.

Processing fee

This fee covers all the processing costs of your loan. This includes the administration and resource cost and is subject to your lender. The processing fee is usually up to 3.93% of your loan amount (exclusive of taxes), but may be higher depending on the lender you choose. It is directly deducted from your sanctioned loan amount before it is transferred to you.

Penal Charge

Delay in payment of instalment(s) shall attract Penal Charge at the rate of up to 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount.

Additional Read: 6 Important Things To Know Before Taking A Personal Loan

EMI bounce charges

Up to Rs. 1,200/- per bounce
“Bounce charges” shall mean charges for (i) Dishonor of any payment instrument; or (ii) Non-payment of instalment (s) on their respective due dates due to dishonor of payment mandate or non-registration of the payment mandate or any other reason.

Document or Statement Charges

Reputed private financiers like Bajaj Finserv, let you download your e-statements, letters and certificates at no extra cost from their customer portal. You can also procure a physical copy of your statements/ letters/ certificates/ other documents from any of our branches.

Part-prepayment charges

You can make part prepayments towards your principal and bring down the loan amount and also the value of subsequent EMIs. However, lenders often levy a fee on part prepayments to make up for the loss of interest.

• Up to 4.72% (Inclusive of applicable taxes) of the principal amount of Loan prepaid on the date of such part Pre-Payment.
• Not Applicable for Flexi Term Loan (Flexi Dropline) and Flexi Hybrid Term Loan.

Foreclosure charges

Similarly, lenders charge you a fee in case you decide to foreclose the loan before the tenor lapses. Foreclosure can be processed post clearance of first EMIs.

• Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment.
• Flexi Term Loan (Flexi Dropline): Up 4.72% (Inclusive of applicable taxes) of the Dropline limit as per the repayment schedule as on the date of full prepayment.
• Flexi Hybrid Term Loan: Up to 4.72% (Inclusive of applicable taxes) of the Dropline limit as per the repayment schedule as on the date of full prepayment.

Read More: Differences between flat and reducing interest rate