Personal Loan hidden charges: Nowadays it has become very easy to take a personal loan. The loan gets approved in a few minutes and the money comes into your account. But do you know that banks and financial institutions also charge many hidden charges, which are usually not informed to you at the time of taking a loan?
These charges can make your loan expensive and put an additional burden on your pocket. Therefore, before taking a personal loan, definitely know about these 10 hidden charges.
1. Processing Fees
Banks charge a processing fee for loan processing, which can usually range from 1% to 3%. This fee is non-refundable, that is, even if your loan is rejected, this money will not be refunded.
2. Foreclosure charges
If you repay the entire loan amount before the stipulated time, the bank can levy a foreclosure charge. This charge can be from 2% to 5%. So, do check this charge before taking a loan.
3. Part-payment charges
If you want to repay some amount of the loan in advance, then some banks charge a part-payment charge for this. This can range from 1% to 3%.
4. EMI bounce charges
If there is not sufficient balance in your bank account and your EMI gets bounced, the banks may charge you Rs 500 to Rs 1000 per bounce.
5. Documentation charges
During loan processing, banks may charge a documentation fee for verification of your documents, which can usually range from Rs 500 to Rs 2,000.
6. Stamp duty charges
In some states, stamp duty is levied on the loan agreement, which can range from 0.1% to 0.2%. This is decided by the state government.
7. Conversion fees
If you wish to change your personal loan interest rate from floating to fixed or fixed to floating, banks may charge a conversion charge of 2% to 3%.
8. Login Fees
Some banks and NBFCs may charge a login fee at the time of applying for the loan, which can range from Rs 500 to Rs 2,000.
9. Loan cancellation charges
If you decide to cancel the loan after applying for it, the bank may ask you for a cancellation charge of Rs 3000 to Rs 5000.
10. Duplicate statement charges
If you need your loan statement or any other document again, banks may charge you Rs 200 to Rs 500 per statement.
How to avoid these hidden charges?
Before taking a loan, get information about all the charges and ask the bank for it in writing. Compare the interest rate with other charges. Read the loan agreement carefully. Pay the EMI on time so that bounce charges are not levied.
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