What Is The Processing Fee For Personal Loan?

What Is The Processing Fee For Personal Loan?

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Confused about extra costs on your loan? Don't worry! With Bajaj Finance, you can check your pre-approved loan offer in just 2 steps and get complete transparency about all fees upfront. No hidden surprises, just clear costs you can plan for.


The processing fee for a personal loan is a one-time charge that lenders collect to cover the costs of handling your loan application. This fee includes expenses for credit checks, paperwork, and evaluating whether you qualify for the loan. You usually pay this fee upfront when your loan gets approved or when money reaches your account. It's typically non-refundable, so it's important to factor this cost into your borrowing budget.


Why it matters: While processing fees might seem like an extra burden, they're a standard part of getting a loan and help lenders cover their operational costs. Understanding these fees helps you compare different lenders and choose the best deal.


 

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Why do lenders impose loan processing fees?

Lenders charge processing fees to cover the real costs of evaluating, approving, and giving out loans. These fees help pay for:

  • Staff time spent reviewing your application
  • Credit checks and background verification
  • Paperwork and documentation
  • Administrative costs
  • Risk assessment and evaluation
     

Smart tip: Knowing the processing fees helps you calculate the true cost of your loan, including the annual percentage rate (APR) that combines personal loan interest rates and all other charges.

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Processing loan processing fees and charges

  • Most lenders charge processing fees ranging up to 3.93% of your loan amount (inclusive of applicable taxes), depending on the lender and your credit profile. However, you might get lucky and find zero processing fee offers under special conditions!
     

    Good news: Lenders sometimes waive processing fees entirely or partially during:

    • Festive offers: Special seasons like Diwali, New Year, etc.
    • High CIBIL scores: If you have excellent credit (750+)
    • Existing customer benefits: Loyal customers often get fee waivers
       

    Pro tip: Always ask about current offers or fee waivers when applying – you might save thousands!
    Only 2 steps to check your eligibility


     

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Common charges and processing fees for a personal loan

Understanding these fees helps you plan the total cost of borrowing and avoid surprise expenses. Here's what you might encounter:

  • Bounce charges

    If your EMI payment fails due to insufficient funds, you'll pay bounce charges plus late payment penalties. This happens when your cheque, NACH, or ECS mandate doesn't clear. The cost typically ranges from Rs. 700 to Rs. 1,200 per bounce.


     

    Why avoid this: Bounce charges not only cost money but also hurt your credit score. Set up auto-debit to prevent this

  • Penal interest charges

    Miss an EMI payment? Lenders impose penal interest – usually at the rate of 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. This adds up quickly and makes your loan much more expensive.
     

    Smart move: Always pay EMIs on time to avoid these hefty penalty charges.

  • Document charges

    Good news here! Downloading loan documents like letters, certificates, and e-statements online is usually free. However, if you need physical copies, you'll pay small document charges.
     

    Additional read: What is personal loan NOC?

  • Part-prepayment charges

    Want to pay off part of your loan early? You can make part-prepayments by paying nominal charges on the amount you're repaying. Remember, the part-prepayment amount should be more than one EMI. These charges don't apply to floating interest rate loans.


    Why consider this: Part-prepayments reduce your total interest burden, even after paying the charges.


     

  • Foreclosure charges

    Planning to close your loan early? You'll need to pay foreclosure charges on the remaining principal amount. This facility lets you repay the entire loan before the tenure ends, which can boost your credit score as a reward for clearing debts faster.


     

    Pro tip: Calculate if the interest savings from early closure exceed the foreclosure charges before deciding.

  • Maintenance charges

    If you choose a Flexi Personal Loan, you will need to pay annual maintenance charges. These charges vary by lender and loan type.

  • Processing charges

    Processing charges are one-time fees that lenders charge for handling and evaluating your personal loan application. This fee is usually a percentage of your loan amount and covers administrative costs like credit checks and documentation.

When taking out a personal loan, it's essential to know all possible charges that may apply.


Processing fees and charges on Bajaj Finance Personal Loan

Bajaj Finserv offers some of the lowest processing fees for personal loans, helping keep your borrowing costs manageable. Along with reduced processing fees, they also impose minimal additional charges and offer competitive interest rates.


Smart planning: Use a personal loan EMI calculator to compute your monthly payments and total interest payable over the entire loan tenure. This helps you plan your budget effectively.


Bottom line: Knowing all types of fees involved with a personal loan makes it easier to estimate the total amount you'll pay while borrowing. Always compare the total cost of borrowing, not just the interest rate!


Read More: Differences between flat and reducing interest rate

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Key offerings: 3 loan types

  • Flexi Hybrid Term Loan
  • Flexi Term Loan
  • Term Loan

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    You can pay interest-only EMIs for up to 24 months, after which, the EMI will consist of both, the principal and the interest. EMI is applicable only on the withdrawn amount.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest on the loan amount you withdraw.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Amount disbursed in one go
    The entire loan amount is disbursed at the start.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest.

  • Flexi facility charges
    No Flexi facility charges.

Personal loan interest rate and applicable charges

Type of fee

Applicable charges

Rate of Interest per annum

10% to 31% p.a.

Processing fees

Up to 3.93% of the loan amount (inclusive of applicable taxes).

Flexi Facility Charge

Term Loan – Not applicable

Flexi variant - A fee will be deducted upfront from the loan amount (as applicable below)

  • Up to Rs. 1,999/- for loan amount less than Rs. 2,00,000
  • Up to Rs. 3,999/- for loan amount from Rs. 2,00,000 to Rs. 3,99,999
  • Up to Rs. 5,999/- for loan amount from Rs. 4,00,000 to Rs. 5,99,999
  • Up to Rs. 7,999/- for loan amount from Rs. 6,00,000 to Rs. 9,99,999
  • Up to Rs. 8,999/- for loan amount from Rs. 10,00,000 to Rs. 14,99,999
  • Up to Rs. 9,999/- for loan amount from Rs. 15,00,000 to Rs. 19,99,999
  • Up to Rs. 10,999/- for loan amount from Rs. 20,00,000 to Rs. 24,99,999
  • Up to Rs. 11,999/- for loan amount from Rs. 25,00,000 to Rs. 29,99,999
  • Up to Rs. 12,999/- for loan amount of Rs. 30,00,000 and above

*All the Flexi facility charges above are inclusive of applicable taxes

*Loan amount includes approved loan amount, insurance premium, and VAS charges.
Principal Holiday Facility Fees
  • Up to Rs.1999/- for loan amount less than Rs.2,00,000
  • Up to Rs.3999/- for loan amount from Rs. 200000 to Rs.399999
  • Up to Rs.5999/- for loan amount from Rs. 400000 to Rs.599999
  • Up to Rs.7,999/- for loan amount from Rs. 600000 to Rs.999999
  • Up to Rs.8,999/- for loan amount from Rs.10,00,000 to Rs. 1499999
  • Up to Rs. 9999/- for loan amount from Rs. 15,00,000 to Rs.19,99999
  • Up to Rs.10,999/- for loan amount from RS. 20,00,000 to RS.2499999
  • Up to Rs.11,999/- for loan amount from RS.25,00,000 to RS. 29,99999
  • Up to Rs. 12,999/- for loan amount of Rs.30,00,000 and above

Above charges are inclusive of applicable taxes & will be deducted upfront from loan amount

*(Loan amount includes approved loan amount, Insurance Premium & VAS Charges)

Bounce charges

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

Pre-payment charges

Full pre-payment

  • 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 to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.
  • Flexi Hybrid Loan: Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.

Part pre-payment

  • Term Loan: 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.

*Foreclosure will be processed post clearance of first EMI

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.

Stamp duty (as per respective state)

Payable as per state laws and deducted upfront from loan amount.

Annual maintenance charges

Term Loan: Not applicable

Flexi Term Loan (Flexi Dropline): Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount (as per the repayment schedule) on the date of levy of such charges.

Flexi Hybrid Loan: Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount during the initial tenure. Up to 0.295% (inclusive of applicable taxes) of total withdrawable amount during subsequent tenure.

Broken period interest / Pre-monthly Instalment interest

Method of recovery of "Broken Period Interest/Pre monthly instalment Interest" would be as follows:


EMI Date : 2nd

Scenario 1: If Loan is disbursed on 1st or post 10th of the month:

For Term Loan: BPI amount will be capitalised, i.e added to Principal amount on Due date / Deducted from disbursement
For Flexi Loans: BPI amount will be capitalised, i.e added to Principal amount on Due date / Added to first instalment

Scenario 2: If Loan is disbursed between 3rd and 10th of the month:
First instalment will consist of interest for actual number of days

Note: Additional cess if any, will be applicable to all charges according to state law.

*Terms and conditions apply.

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Bajaj Finance Limited has the sole and absolute discretion, without assigning any reason to accept or reject any application. Terms and conditions apply*.