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Fees and charges on your Engineer Loan explained

  • Highlights

  • Low processing fee on your loan

  • Access loan statements at no fee

  • Bounce charges and penal interest

  • foreclose and prepay your loan at low charges

Your engineering firm needs a constant and continuous flow of cash to keep it running. If you don’t generate enough cash flow, you must take recourse to meet operational expenses and other costs. One way of doing this is by taking a loan customised for engineers. This allows you to put your blueprint into action and keep the gears of your enterprise running smoothly. But, before signing up for any form of credit, it is important to know the fees and charges associated with it. This helps you determine whether the loan is cost-effective and gives you time to properly plan repayment.

Take a look at the fees and charges associated with a loan for engineers.

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1. Processing fee

Also known as a loan application fee, this is a cost you bear for your loan to be processed. Processing involves checking your application for proper documentation, carrying out a credit check, etc. This fee varies from lender to lender. It will be cost-effective for you to seek a lender who doesn’t charge you an exorbitant processing fee. When you take a Loan for Engineers from Bajaj Finserv, for example, you only have to pay 2% towards processing fees. Besides, you benefit from a nominal rate of interest, flexible tenor and a flexi loan facility.

2. Statement charges

A loan statement contains details such as the interest rate of your loan, the amount you have borrowed and information pertaining to EMIs already paid and those coming up. Similar to this are the interest and principal statement charges. Though some lenders charge you for this, look for one who doesn’t. A Bajaj Finserv Engineer Loan gives you online access to your loan account so that you can easily keep a track of all your loan-related information at the click of a button.

3. EMI bounce charges and penal interest

When you take a loan, you have the obligation to pay both the principal and interest of the loan in equated monthly instalments or EMIs. Usually, you can pay these EMIs through post-dated cheques. If any of these cheques bounce, you pay a bounce charge usually amounting to Rs.1,000 for every bounce. If you default or delay payments, you also have to pay a penal interest of around 2% per month on the delayed instalments.

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4. Foreclosure charges

Foreclosure charge is what you pay when you fully repay the loan before the tenor ends. This charge helps lenders protect their foregone interest. Depending on whether your interest rate is fixed or floating, you will have to pay no foreclosure charges, or pay around 4% on the outstanding amount. Choose a lender with low foreclosure charges, since paying off your outstanding debt when you have the money to do so is cheaper than continuing repayment with added interest.

5. Part prepayment charges

When you have extra funds, you can pay off a portion of the loan, known as a part prepayment. This reduces your principal and hence results in you paying lower interest. This means you will then pay lower EMIs or can repay the loan earlier. Usually, the prepayment amount needs to be more than the value of one EMI. Like foreclosure charges, this charge is also levied based on whether your interest rate is fixed or floating. It can vary from you having to pay nil charges to about 2%.

However, if you take an Engineer loan in a flexi-format then you don’t have to pay any prepayment charges as here you have an added benefit to make multiple prepayments and withdrawals on your loan as per your convenience.

Knowing what these charges will help you evaluate your loan for engineers, and be better prepared for its repayment.

The information, products, and services included in or available on bajajfinserv.in may include inaccuracies or typographical errors. Changes are periodically added to the information herein. bajajfinserv.in and/or its respective suppliers / affiliates may make improvements and/or changes on the bajajfinserv.in website at any time.
The material contained in this site and on associated web pages is general information and it is not intended to be advice on any particular matter. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. The decision with respect to any financial product or opportunity or nature or suitability or choice or the viability of any product or service shall always be sole responsibility and decision of the subscriber and user.

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