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Personal Loan disbursement and charges levied by banks

# Little Savings

A recent personal loan helps me to understand the process of a personal loan request to the bank.

First, I called up my personal banker and inquired about the personal loan charges. Each bank should be transparent on the different charges levied by them.
               They glanced me on the interest rate, tenure, stamp duty, processing fees, GST and EMI.
They offered less than normal interest rates. This depends on your repay ability and CIBIL score.

They collected few details(KYC) and offer has been created to my account. From the net-banking account, I booked the personal loan. The disbursed amount is less than the booked amount as the processing fees and other charges are deducted and the remaining amount has been disbursed.

Different Charges:

Stamp Duty: It depends on the different states & laws abide by them. Usually 200 rupees for less than 2 lakhs.

Processing Fees: This is the major amount where bank charges for processing the loan. It varies from bank to bank and would be around 1% to 3%.

Pre-Payment charges: 4% to 2% based on the tenure... Pre-payment at end of the tenure will decrease the charges.

Late payment charges: 2% per month on the total outstanding/unpaid EMI.

EMI Return Charges: If the SI/Cheque has been authorized and by the time of EMI due date, if the account doesn't have the sufficient funds, they charge EMI Return Charges as 550 rupees.


Below charges are for/after rescheduling the loan:

Loan Reschedule charges: One can change the due date or extend the tenure to some more months, a charge will be levied 0.5% on the amount paid.

CIBIL report copy charges: Since CIBIL score report has to be taken by third party entity, they charge 50 rupees, if you request CIBIL report.

Duplicate Repayment schedule charges:  After the re-schedule, if requested for the new charges to know about tenure, EMI etc.,, this will be levied. They charge 200 rupees per request.

You can visit the fee charges page of any bank to compare the charges.
HDFC Fee Charges link
Yes Bank 

Few Facts on personal loans:

  • Eligibility of personal loan is 12 times of your monthly salary.
  • Interest rates are in multiples of "0.5". Eg., 13.5%, 15% etc.,
  • No pre-payment can be done for less than 1 year tenure loans.
  • You can pay upfront processing fees and get the required full loan amount.
  • No GST for the EMI.
  • Can also pay advance EMI's.  

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