A Personal Loan helps you achieve several of your life’s dreams and goals. These loans can be taken for innumerable reasons, whether you wish to fund your dream wedding or take off on an international trip, whether you want to buy a consumer durable or to pay off Credit Card debt. There is also no limitation to how you can use the funds. Your bank levies specific charges on this loan. Here are some charges you incur on a Personal Loan.

1. Loan processing charges

The bank has to bear some administrative costs while processing and sanctioning your loan. This is usually a small amount, which varies from bank to bank and typically costs about 0.5% to 2.50% of the total loan amount and is subject to change. Every bank fixes a minimum and maximum percentage of the loan processing fees, which the borrower must pay. You can pay this fee upfront or deduct it from the loan amount when disbursed. Remember that a loan processing fee is a non-refundable expense.

2. Penalty on EMI defaults

Banks allow you to repay the loan in small amounts through equated monthly instalments or EMIs. As a borrower, you must ensure that you have adequate funds to pay your EMIs on time. Failure to do so may result in you having to incur a penalty. That is why it is crucial to opt for an EMI amount you can afford, instead of trying to rush in paying off the loan. This is where a Personal Loan EMI Calculator is useful.

3. Prepayment/Foreclosure penalty

Banks recover their money from the interest you pay on the loan. If you pay off your debt before the stipulated tenure, your bank may incur a loss, with you discontinuing your loan before the set tenure. Your bank may charge you a prepayment penalty to compensate for this loss.

Even with these charges, a Personal Loan makes a great financial assistance when needed. 

Apply Now for HDFC Bank Personal Loan Online


 

*Terms & conditions apply. Personal Loan disbursal at the sole discretion of HDFC Bank Ltd. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.

For a seamless experience, check out our Personal Loan App.