Keep in mind that the processing fee for home loans is payable only after approval.
Don’t we all want to have a dream home of our own? One of the ways we could have it is by taking a home loan. However, there are some additional fees to be aware of. While interest is the most significant charge levied by banks, another important cost is the processing fee. The lender charges a one-time fee to complete the application process. Furthermore, it differs between lenders and is determined by the amount of your house loan.
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Keep in mind that the processing fee for home loans is payable only after approval. Because this is a service charge, often known as an “administrative fee,” an 18 per cent GST is added to the final price. But in some situations, you may be required to pay an advance cost, which may be non-refundable and this is totally up to the lender.
A lender can recover all of its credit underwriting-related charges via the processing charge. Some lenders even charge a fixed processing fee, whilst others frequently charge a variable processing fee that might reach 2 per cent of the loan amount.
As of September 7, 2023, the leading banks and their processing fees for a home loan are as follows:
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Punjab National Bank (PNB):
PNB is offering a home loan interest rate between 8.50 per cent to 10.10 per cent for salaried workers. The bank charges a processing fee of 0.35 per cent (minimum Rs 2,500 and maximum Rs 15,000) plus documentation charges of Rs 1,350.
HDFC Bank:
For salaried employees, HDFC Bank offers a house loan interest rate ranging from 8.50 per cent to 9.40 per cent. The processing cost is up to 0.50 per cent of the loan amount, or Rs 3,000, whichever is greater, plus applicable taxes.
State Bank of India (SBI) Term Loan:
For salaried employees, SBI provides home loan interest rates ranging from 8.70 per cent to 9.65 per cent. The bank will give you up to 0.40 per cent + GST (minimum Rs 10,000 and maximum Rs 30,000 + GST). (Exceptional Buildertie-up Projects)
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Axis Bank:
Axis Bank is providing a home loan interest rate from 10.50 per cent to 9.90 per cent for salaried personnel. In addition, the processing fee of the bank is up to 1 per cent of the loan amount subject to a minimum of Rs 10,000.
ICICI Bank:
For salaried employees, ICICI Bank provides a home loan interest rate ranging from 9.25 per cent to 9.90 per cent. Meanwhile, the processing cost is between 0.50 per cent and 2 per cent, with a minimum of Rs1,500.
Bank of Baroda:
For salaried workers, the Bank of Baroda offers house loan interest rates ranging from 8.60 per cent to 10.50 per cent. The bank charges a processing fee ranging from 0.25 per cent to 0.50 per cent of the loan amount. (which is a minimum of Rs 8,500 and a maximum of Rs 25,000).
