Who doesn't dream of having their own home? One way to achieve this dream is by getting a home loan. But it's important to be aware of additional fees. While interest is a major cost, don't overlook the processing fee. This one-time fee, varying between lenders and based on your loan amount, is charged to complete your application.
Keep in mind, you'll only pay the processing fee after your loan gets approved. It's often called an "administrative fee" and comes with an 18% GST. Sometimes, lenders may require an advance fee, which could be non-refundable.
The processing fee covers the lender's credit underwriting-related costs. Some lenders charge a fixed fee, while others use a variable fee that can go up to 2% of the loan amount.
Here's what leading banks charge for home loan processing:
Punjab National Bank (PNB):
• Interest Rate: 8.50% to 10.10% for salaried workers
• Processing Fee: 0.35% (min Rs 2,500, max Rs 15,000) + Rs 1,350 documentation charges
HDFC Bank:
• Interest Rate: 8.50% to 9.40% for salaried employees
• Processing Fee: Up to 0.50% of the loan amount or Rs 3,000 (whichever is higher) + applicable taxes
State Bank of India (SBI) Term Loan:
• Interest Rate: 8.70% to 9.65% for salaried employees
• Processing Fee: Up to 0.40% + GST (min Rs 10,000, max Rs 30,000 + GST) for Exceptional Builder tie-up Projects
Axis Bank:
• Interest Rate: 9.90% to 10.50% for salaried personnel
• Processing Fee: Up to 1% of the loan amount (min Rs 10,000)
ICICI Bank:
• Interest Rate: 9.25% to 9.90% for salaried employees
• Processing Fee: 0.50% to 2% (min Rs 1,500)
Bank of Baroda:
• Interest Rate: 8.60% to 10.50% for salaried workers
• Processing Fee: 0.25% to 0.50% of the loan amount (min Rs 8,500, max Rs 25,000)
Understanding these fees is crucial when considering a home loan from these leading banks.
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