Different types of fees on home loans | Fusion - WeRIndia

Different types of fees on home loans

Different types of fees on home loans

Banks charge different types of fees on home loans. The processing fee is the most common fee that several people know. However, there are other fees also charged by the banks on home loans.

Here is a list of different types of fees charged on home loans:

  • Banks charge login fee or administrative fee or application fee from customers. It is a non-refundable amount charged by certain banks. The fee varies from ₹2,500 to ₹6,500. This amount is charged before the approval of your loan.
  • Late payment fee or penal interest rate is charged for the delay in payment of your EMIs. It varies from 2 to 3 per cent of the delayed payment. Banks charge this amount every month till you pay the instalment amount.
  • Banks generate CIBIL report while processing your loan. If you want a copy of your CIBIL score report, then banks will charge up to ₹1,000.
  • Banks charge a legal fee towards legal expenses incurred for creating home loan agreements, especially in tripartite agreements. These agreements normally involve the customer, builder and bank. The fee amount depends on the amount charged by the legal advisor.
  • MOD means Memorandum of Deposit of Title Deed. MOD charge or MODT charge is collected for depositing the title documents with the bank. It is levied by the government and varies from state to state.
  • Recovery charge or collection charge is levied on customers if they do not pay their EMIs regularly and their account goes into default. At that time, banks take suitable action against them. Charges vary depending on the actual expenses of the process.
  • Document retrieval charges or closure charges are levied by banks at the time of closure of your loan. This amount ranges from ₹500 to ₹5,000 to hand over all your original documents to you. However, banks will return your originals only after the closure of the loan.

Image by Nattanan Kanchanaprat from Pixabay (Free for commercial use)

Image Reference: https://pixabay.com/photos/money-home-coin-investment-2724237/

Leave a Reply

Your email address will not be published. Required fields are marked *