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  • A Comprehensive Guide to Home Loan Fees and Charges

    The most important and clear fee charged on home loans is the processing fee. It is a fee you have to pay banks or NBFCs to deal with your home loan application. It is a one-time fee that is usually paid upfront – that is, you have to pay it out of your own pocket to the bank/NBFC instead of it being deducted from your loan amount. Some banks may call it administrative fee. Usually the processing fee will be charged only after your application is approved.

    Most banks charge a processing fee on their home loan schemes. However, some financial institutions either do not charge any processing fee or waive it as a special offer. Some banks may have separate charges for salaried persons, self-employed professionals (SEP), and self-employed non-professionals (SENP).

    Home Loan Processing Fees of Banks in India

    Processing fee is generally a percentage of the loan amount. Banks might also specify a minimum and/or a maximum amount chargeable. Being a service charge, you also have to pay GST on it. The current GST on services is 18%.

    The table below gives you a comprehensive list of all the banks in India and the processing fee charged by them, from the lowest to the highest:

    Name of the Lender Processing Fee (in percentage) Minimum processing fee Maximum processing fee
    State Bank of India (SBI) Privilege/Shaurya Home Loan Nil - -
    Saraswat Bank - Rs.0 Rs.20,000
    IOB Gharonda - Indian Overseas Bank PMAY Scheme - Rs.2,000 R.3,000
    Karur Vysya Bank - Rs.2,500 Rs.7,500
    Central Bank of India Cent Home Loan Plus - - Rs.500
    LIC Housing Finance - - Rs.15,000
    IDBI Bank - - Rs.5,000
    Syndicate Bank 0.125% Rs.500 Rs.5,000
    Punjab and Sind Bank 0.15% to 0.25% Rs.1,000 Rs.15,000
    Indian Bank 0.23% - Rs.20,470
    Allahabad Bank 0.24% to 0.4% - Rs.15,000 for Rs.1 crore or less Rs.50,000 for over Rs.1 crore
    HUDCO 0.25% - -
    Bank of India Star Home Loan/Star Smart/Star Pravasi Individuals - 0.25% Corporates/Partnership firms - 0.5% Rural areas: 0.1875% Rs.1,000 Rs.10,000
    Jammu and Kashmir (J&K) Bank* 0.25% Rs.5,000 Rs.25,000
    Bank of Maharashtra 0.25% - Rs.25,000
    Bank of India Star Diamond Home Loan Individuals - 0.25% Corporates/Partnership firms - 0.5% Rural areas: 0.1875% Rs.50,000 -
    UCO Bank 0.25% to 0.5% Rs.1,000 Rs.15,000
    Bank of Baroda 0.25% to 0.5% Rs.8,500 Rs.25,000
    DBS Bank 0.25% to 1% - -
    State Bank of India Home Loans 0.35% Rs.2,000 Rs.10,000
    Citibank Rs.5,000 + 0.4% - -
    SBI Earnest Money Deposit 0.5% Rs.1,000 -
    Canara Bank 0.5% Rs.1,500 Rs.10,000
    Federal Bank 0.5% Rs.3,000 Rs.7,500
    South Indian Bank 0.5% Rs.5,000 Rs.10,000
    Union Bank 0.5% - Rs.15,000
    Central Bank of India - Cent Home Loan/Cent Home Loan Double Plus Scheme/Purchase of 3rd or 4th flat or house 0.5% - Rs.20,000
    Indian Overseas Bank 0.5% - Rs.25,000
    Oriental Bank of Commerce 0.5% Rs.2,000 Rs.30,000
    SBI Corporate Home Loan 0.5% Rs.50,000 Rs.10 lakh
    Catholic Syrian Bank 0.5% - -
    Tamilnad Mercantile Bank 0.5% - -
    Tata Capital 0.5% onwards - -
    Corporation Bank 0.5% to 1% Rs.1,000 Rs.50,000
    United Bank of India 0.59% Rs.1,180 Rs,11,800
    ICICI Bank 0.5% to 1% Rs.2,000 in Bangalore/Delhi/Mumbai Rs.1,500 in other Indian cities -
    Abhyudaya Co-operative Bank 0.6% - -
    IIFL Up to 0.75% Rs.3,000 -
    Cosmos Bank 0.5% to 1% - -
    HDFC Limited Salaried persons/SEP: Up to 0.5% SENP: Up to 1.5% Salaried persons/SEP: Rs.3,000 SENP: Rs.4,500 -
    DHFL** Salaried persons/SEP: Rs.5,000 to Rs.20,000 SENP: Net PAT - 0.5%; Others - 1.5% - -
    Axis Bank** Up to 1% Rs.10,000 -
    Aditya Birla Housing Finance Limited Up to 1% - -
    Standard Chartered Bank Up to 1% - -
    Deutsche Bank Up to 1% - -
    Indiabulls Rs.10,000 to 1% - -
    Bajaj Finserv Salaried persons: Up to 0.8% SEP/SENP: Up to 1.2% - -
    Bandhan Bank 1% Rs.5,000 -
    PNB Housing Finance Limited 1% Rs.10,000 -
    Dhanalakshmi Bank 1% Rs.10,000 -
    HSBC Bank 1% Rs.10,000 -
    City Union Bank 1.1% Rs.250 -
    RBL Bank*** 1.50% - -
    Gruh Finance Limited^ Rs.3,500 to 2% - -
    Aavas Financier Limited Up to 2% - -
    Kotak Mahindra Bank Up to 2% - -
    Yes Bank 2% - Rs.15,000
    IndusInd Bank 2% Rs.5,000 -
    ISFC 2% to 3% - -
    Religare Limited Up to 3.5% - -

    *J&K Bank gives 50% waiver of processing fee for women borrowers, whether they are sole borrowers or joint borrowers.

    **Axis Bank and DHFL collect Rs.2,500 as minimum login fees at the time of application. This is non-refundable; if your loan is sanctioned then this amount will be reduced from the processing fee.

    *** RBL Bank levies an application fee of Rs.6,500 for Mumbai and Rs.5,000 for other Indian cities.

    Gruh Finance has processing charge, processing fee, and administrative fee. Check with the company before you apply.

    The banks listed below do not specify any processing fees for home loans on their website. Please check with the respective banks before applying.

    • Andhra Bank
    • Karnataka Bank
    • Lakshmi Vilas Bank
    • Magma Fincorp
    • IDFC First Bank

    Top Banks Giving Home Loan at Zero Processing Fees

    Here are some banks that have no processing fee or offer a waiver of processing fee for home loans:

    • State Bank of India, for SBI Privilege Loan and SBI Shaurya Loan
    • Syndicate Bank, for Synd Kuteer scheme
    • Saraswat Bank, for Vastu Siddhi Home Loan of less than Rs.28 lakh
    • Nainital Bank, for Apna Ashiana

    Glossary of Different Types of Fees & Charges on Home Loans

    Apart from Processing Fees, home loans come with several other fees/charges/penalties. Before you apply for a home loan, it’s important to know these so that you are not confused by the terminology and are clear about what you’re the paying the bank for.

    All banks may not levy all the charges given below, some banks may employ different terminologies, while some others may club multiple of these under the same type of fee. However, knowing how much you are expected to pay for various actions while you have a housing loan can be very useful.

    Roughly, the fees can be divided into the following:

    • Loan-related Fees
    • Document-related Fees
    • Legal and Government Fees

    Let’s look at what each fee in home loans means. Note: You may need to pay additional GST on almost all the charges given below.

    Loan-related Fees

    1. Login Fee: Sometimes also called the Administrative Fee or Application Fee, this is a non-refundable amount charged by certain banks when you apply for a loan, even before your loan is approved. It ranges from Rs.2,500 to Rs.6,500. If your loan is approved, you have to pay the processing fee, which will be charged minus this amount. For example, if you paid Rs.2,500 as login fee and the processing fee is Rs.12,500, then you need to pay only Rs.10,000 after approval.
    2. Prepayment Charge: Also known as Foreclosure Charge and Preclosure Charge, this fee is applicable if you pay off your home loan in full before the end of the tenure. Most banks charge no foreclosure fee for floating rate loans and for individual borrowers (as opposed to companies). When this fee is levied, it ranges between 2% to 6% of the outstanding amount. So, if you are closing your loan account by paying the balance of Rs.12 lakh, then you may have to pay between Rs.24,000 and Rs.60,000 to the bank.
    3. Partial Prepayment Charge: Also known as Part-payment Charge or Part Prepayment Fee, this is levied by banks in case you’re paying off a part of the balance amount and not in full. Again, floating-rate schemes are usually exempt from this, but when charged, the fee ranges from 0.5% to 2% of the balance loan amount. So, if your bank levies this fee and you make multiple partial payments, remember that you are likely to end up paying the bank a lot more than you intend to.
    4. Late Payment Fee: Also known as Penal Interest Rate, this is charged if you delay payments of your EMIs. It is usually between 2% to 3% of the delayed/defaulted amount every month until the payment is made.
    5. Conversion Charge: Also known as Switching Fee, this is applicable if you wish to convert your floating-rate package to a fixed-rate one or vice versa, or from the existing floating rate to a revised one. So, if your lender’s MCLR or Prime Lending Rate goes down and the overall interest rate reduces, it won’t be applicable until you pay this fee and make a conversion or switch. The charge may range from 0.25% to 3% of the balance amount, or the lender might fix a specific amount such as Rs.1,000+GST for LIC Housing Finance loans below Rs.75 lakh.
    6. Repayment Mode Swap Charge: You need to pay this fee if you want to change the repayment method or dates. It’s generally Rs.500 per request.
    7. Recovery Charge: This amount, also known as Collection Charge, is levied if you do not pay your EMIs, your account goes into default, and the bank/lender has to take any action against you. Mostly the fee charged depends on the actual expenses of the process.
    8. Insurance Premium: Though it is not mandatory to buy a home or life insurance policy along with a housing loan, most banks will insist that you insure your property against physical damage and make them the beneficiary. This is to help the banks cover their losses. So, don’t forget to factor in the premium amount as well when you think of a home loan.

    Document-related Fees

    1. Stamping Charge: This is applicable on any legal document between you and the bank that needs to be signed on stamp paper. The charges will depend on the actual costs incurred.
    2. Income Tax Certificate Charge: Most banks will not charge you anything to provide a provisional or final income tax certificate towards your home loan interest and principal repayment. However, when charged, it ranges from zero to Rs.500 each time you want one.
    3. Interest Certificate Charge: This is when you need a certificate of the amount of interest you paid during your loan repayment from the bank. The fee ranges from zero to Rs.500 per request.
    4. NOC/NDC Charge: This is the fee you have to pay to get a No Objection Certificate (NOC) or No Dues Certificate (NDC). The fee ranges from zero to Rs.500 per request.
    5. Duplicate NOC or NDC Charge: If you need a duplicate copy of the NOC or NDC of the loan account or the property, then you may have to pay a certain fee. Usually this ranges from Rs.100 to Rs.500 per instance.
    6. Fee for Revalidation of NOC: This is if you need the bank to revalidate your No Objection Certificate. The usual charge is around Rs.100 to Rs.500.
    7. Agreement Copy Fee: If you need a copy of the loan agreement, then you may have to pay a certain fee to the bank. This ranges from zero to Rs.500. These charges are applicable to any document that you request from your lender.
    8. Issuance Charge for Photocopy of Title Documents: You may have to pay between zero to Rs.1,000 each time you request for a copy of your property’s Title Documents, the originals of which will be with the bank until the loan is completely repaid.
    9. Duplicate Statement Issuance Charge: This has to be paid if you need a duplicate statement of your loan account. It’s also known as Statement Charge or Statement of Account Issuance Fee. The amount charged ranges from zero to Rs.250 per request.
    10. Amortisation Schedule Issuance Fee: If you want a detailed amortisation schedule for your loan tenure, then you may have to pay between zero to Rs.250 per request.
    11. Document Retrieval Charge: This is applicable at the closure of loan, when you need all the original documents of your property back from the bank/finance company. The charges range from Rs.500 to Rs.5,000.
    12. CIBIL Report Fee: This fee is charged if you want a copy of your CIBIL credit report, and it is usually between zero to Rs.1,000 per instance.

    Legal/Government Charges

    1. Legal Fees: This amount has to be paid for all the legal expenses surrounding the creation of home loan agreements. This might include drawing up the tripartite agreement among you, the builder, and the bank/NBFC, and certifying any other required document. The amount to be paid will be based on actual amount charged by the legal advisor/lawyer.
    2. Valuation/Inspection Fee: The bank will levy this amount for legal valuation and inspection of the property you are buying and pledging for the loan. The amount you have to pay will depend on the actual charges incurred.
    3. MOD Charge: Memorandum of Deposit of Title Deed (MoD) confirms that you’ve given your property’s title deeds/ownership papers to the bank as collateral for the loan. It confirms the ownership of the specific property. It is also called MODTD, DTD, or MODT, and is typed out on a non-judicial stamp paper. This document can be of use if your property is involved in a legal problem. MoD charges are different for different states. For example, MOD charge in Karnataka is 0.1% to 0.2% of the cost of the property (min. Rs.500 and max. Rs.10 lakh).
    4. CERSAI Charge: CERSAI stands for Central Registry of Securitisation Asset Reconstruction and Security Interest of India. When you pledge your property with a financial institution, that pledge has to be registered with CERSAI. This has to be done in order to ensure that the same asset is not used as collateral for multiple loans. CERSAI Charges range from Rs.50 to Rs.500, depending on what action you’re taking.

    Please note that Stamp Duty and Registration Fees are not covered by your bank loan. You have to pay it separately, and the amount payable differs from state to state.

    Other standard fees applicable to other types of loans and deposits, such as Document Retrieval Charges and Cheque Bounce Charges remain the same for home loan as for any other banking division. Also check for loan cancellation charges (if you decide to not take a loan after it is sanctioned) – that might come as a percentage of the loan amount or a specific amount. Delay in submitting the required documents or filing your records may also invite a penalty.

    Make sure you read the MITC (Most Important Terms & Conditions) document and the loan agreement that the bank sends you – these documents will have all the kinds of fees and charges applicable to your loan.

    Frequently Asked Questions
    1. When will I have to pay the processing fees on my home loan?

      Most lenders charge processing fees either in full or in part, when you submit your home loan application and/or after the loan is approved.

    2. Can I ask for a processing fee waiver from my bank?

      You can. If you are eligible for a processing fee waiver, the lender will approve it.

    3. Will I get a refund on my processing fees if my home loan application is rejected?

      Lenders may give you a partial refund on the processing fee paid at the time of application after withholding a portion of the fee paid. Depending on the bank/FI, you may get a partial refund or no refund of the processing fee paid.

    4. Are there any banks that do not charge a processing fee on home loans?

      Processing fees are usually charged by lenders to cover their costs when they process your loan application. However, some lenders run festive offers and promotions from time to time where they waive the processing fees. Currently, SBI and BOI are offering processing fee waivers on their home loans.

    5. What is the GST charged on processing fees?

      An 18% GST is charged on processing fees.

    6. How can I compare the processing fees of different banks’ home loans?

      This page contains a tabular list of all the banks and their home loan processing fees. That should help you make the comparison.

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