- By Aditya Pratap Singh
- Wed, 24 Jan 2024 07:29 PM (IST)
- Source:JND
Home Loan: To have a own home is a dream for everyone and it is one of the biggest purchases of an individual's life as well. In India, a home loan is the most assisting tool that helps people to buy their dream home. It is a kind of loan with the highest amount and longest tenure. Therefore, before taking a home loan, compare the interest rates offered by different banks. You should also compare the other charges as well. The additional charges vary from bank to bank.
Below are the additional charges on home loan
Home Loan Application Fees
When you apply for a home loan, an application fee is charged to process your loan application. The fee is non-refundable Therefore, before applying for a home loan, make sure that you are going to take it with the same bank.
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Processing fees
It is not only the application fee, banks and financial institutions charge processing fees as well. Like the loan application fee, it is non-refundable as well. Some institutions offer the option to pay a part of this fee along with the loan application.
Legal fees
Financial Institutions hire External lawyers to investigate the legal status of the property. The banks charge legal fees if applicable.
Commitment fee
Some Banks and NBFCs charge commitment fees as well. A commitment fee, followed by processing and application fee, is charged in case the loan is not availed within the stipulated period.
Prepayment penalty
When the loan borrower deposits the money before the end of the loan tenure, it is called prepayment. In such cases, banks impose a penalty. This charge varies from bank to bank. However, the Reserve Bank of India has directed all banks not to charge prepayment penalties on home loans taken at floating interest rates.
