Knowing what you’ll need to pay in terms of processing fees and other charges on your personal loan for travel will help you plan for the loan better. Here’s a list to keep in mind.
It is always good to know what a loan costs before applying for it. While knowing your EMI is one part of this, being familiar with the other fees and charges makes up the other half. An understanding of what exactly your loan entails will help you manage your finance better and repay the loan conveniently. This guideline applies to a personal loan for travel as well.
Listed below are some charges that you must bear when you apply for a Personal Loan for Travel:
1. Processing fees
This is the fee that is charged for processing your application. It is a representative of all the costs involved while sanctioning your loan. It includes everything right from the cost of undertaking the verification process to actual administrative expenses.
It is usually 3.93% of the overall loan amount. You have to pay this fee at the time of signing the loan agreement.
2. Secure fee
This is a fee that is exclusive to when you file your loan application online. This is charged as maintenance fee to keep the lender’s online systems secure and free from hackers and malware.
This fee is around Rs. 2,499 and has to be paid after completing the online application procedure.
3. Interest rate
This is the interest that you pay the lender in exchange for the funds that are lent to you. Essentially, it is the cost of availing credit.
This fee starts from 11% onwards and has to be paid on a monthly basis. It is part of the EMI amount that you pay every month.
Additional Read: The different types of loans available in India
4. EMI bounce charges
In case your EMI cheque bounces, this fee is charged as a penalty, over and above the EMI amount. The fee is usually Rs. 700 to Rs. 1,200 per bounce. Hence, it important to always credit cash to the bank account that you use to pay your EMI.
5. Penal interest rate
In case the borrower fails to make payments on time, a penal interest rate will be applicable. This is a penalty for not having made regular payments.
This fee is 3.50% per month after the original tenor has lapsed.
6. Foreclosure charges
Foreclosure often puts the lender’s interest at risk. So, this fee is sometimes charged when an applicant wants to foreclose the loan before the tenor lapses.
This fee is around up to 4.72% (inclusive of applicable taxes)
Additional Read: 5 important things to know before taking a Personal Loan
7. Part prepayment charges
When an individual makes a part prepayment towards the personal loan, the lender stands to lose out on interest.
So, the lender usually charges Up to 4.72% (inclusive of applicable taxes) as part - prepayment charges, exclusive of taxes, as a cost if you want to make use of this facility.
8. Annual maintenance charges
As the name suggests, this is a charge that is passed on to you in exchange for maintaining your account. These charges are at 25% for a Personal Flexi loan and Personal Term Line, billed to you on an annual basis.
Knowing about these charges in advance can help you plan your holiday without any unplanned surprises. Visit your dream destination with the help of a Travel Loan offered by Bajaj Finserv. It offers you a range of benefits such as flexible prepayment options, customisable tenor, and a nominal interest rate.
Additional Read: Overdraft Vs Personal Loan
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