When you are applying for a home loan, the lending bank or organisation charges a certain amount towards the services they provide you. This amount is called as the home loan processing fee. The home loan processing charges is a percentage of the total home loan amount that you are applying for. The home loan processing charges are non-refundable, i.e., even if the application is rejected, the amount will not be returned to you.
Applicants must also remember that home loan processing fees is not the only amount that you have to pay. There are other charges too. These charges are in addition to the home loan interest rates. That’s why it is advisable to learn about these charges beforehand, so that you understand the costs involved before applying for a home loan.
|Stage||Fee/Charge Description||Payable at||Amount in Rs.|
|Pre-disbursement||Processing fee (PF)||Application||Salaried: 0.5% (plus taxes and any other applicable statutory dues) of loan amount;|
|Self-Employed, HL top-up/Commercial Purchase: 1.0% (plus taxes and any other applicable statutory dues) of loan amount;|
|Upfront PF of Rs. 5,000 (plus taxes and any other applicable statutory dues) shall be collected at the time of login which is non-refundable.|
|(Non-refundable fee will be adjusted in overall PF before disbursement)|
|Post-disbursement||Copy of Any Documents|
|Interest Certificate/ Statement of Account/ Amortisation Schedule||Event||Accessed via self-service mode on Mobile Banking/Net Banking/Whatsapp Banking: Free|
|Physical/Soft copy request through Customer Service/Branch: Rs. 250 (plus taxes and any other applicable statutory dues)|
|Charges for copy of any documents (Duplicate NOC, Copy of property documents, etc.)||Event||Rs. 500 (plus taxes and any other applicable statutory dues)|
|Any Other documents /letter (e.g. Subsidy Confirmation Letter, Credit Opinion Letter, Interest paid confirmation letter, etc.)||Event||Rs. 500 (plus taxes and any other applicable statutory dues)|
|Change in Repayment mode|
|Repayment mode/ Account swap charges||Repayment mode change||Rs. 500 (plus taxes and any other applicable statutory dues)|
|Switch Fee||On conversion||Switch to lower floating rate(with/without change in Benchmark) for Housing/Extension/Improvement: 0.5% of the principal outstanding and undisbursed amount(if any) at the time of conversion with a cap of Rs. 10,000 (plus taxes and any other applicable statutory dues)|
|Prepayment/Foreclosure Charges||Prepayment/ Foreclosure||NIL for Term Loans given to Individual Borrowers for non-business end use.|
|For Micro & Small Enterprises (MSE):|
|MSE certified borrowers if loan is foreclosed from own source of fund: NIL|
|MSE certified borrowers loan closed from borrowed funds: 3% (plus taxes and any other applicable statutory dues) of the prepayment/foreclosure amount|
|Others (Individual borrowers for business end use and Non-individual borrowers) :|
|• No prepayment / foreclosure is allowed until a Lock-in Period of 6 months after EMI Commencement|
|• Post lock– in period, part prepayment of minimum Rs. 25,000 and maximum of up to 25% of outstanding loan amount can be made without any prepayment charges every 6 months|
|• The minimum period between any two prepayment shall be at least 6 months|
|• For any Part Prepayment in excess of 25% of outstanding loan amount: 3% (plus taxes and any other applicable statutory dues) of the excess prepayment amount|
|• For Full Prepayment any time after the Lock-in-Period: 3% (plus taxes and any other applicable statutory dues) of the Foreclosure Loan amount plus amounts prepaid during the last 12 months|
|Instrument (Cheque/ECS/Mandate) dishonour charges||Instrument dishonour||Rs. 500 (plus taxes and any other applicable statutory dues)|
|Substitute Interest (Penal Interest)||Late payment||2% per month (plus taxes and any other applicable statutory dues) on unpaid EMI amount for delayed period|
|Collection charges (In case of default)||Late payment||30% (plus taxes and any other applicable statutory dues) of cheque/instrument dishonour charges plus penal interest|
|E.g. EMI amount due for 30 days (a month) - Rs. 1,00,000|
|Penal interest (I) - Rs. 2000|
|Instrument dishonour charge (II) - Rs. 500|
|Total (I)+(II) - Rs. 2500|
|Collection charge excluding taxes - Rs. 750 (30% of Rs. 2500)|
|Levy of penal interest for non-compliance of sanction terms including but not restricted to increase in credit risk like non-submission of title documents, non-commencement of construction as per undertaking, adverse repayment behaviour, other breach of agreement terms||Event||2% incremental pricing over and above existing spread (plus taxes and any other applicable statutory dues)|
|Legal charges||Event||As Incidental/ At Actuals|
|Loan cancellation: Charges applicable in the event of customer opting to cancel the loan post disbursement without encashing the Disbursement Cheque.||Event||0.10% of Loan Amount or Rs. 25,000 whichever is higher (plus taxes and any other applicable statutory dues)|
|(If encashed the same shall be treated as pre closure/foreclosure)||This will be over and above PF payable.|
|Charges specific to OD (Overdraft) facility|
|Post-disbursement||Annual Renewal Charges||Renewal||0.25% (plus taxes and any other applicable statutory dues) of the OD limit (dropped limit after reduction of annual drop) shall be collected on the due date of renewal.|
|Not Applicable for Smart Home Loan OD product.|
|Non-utilization Charges||Event||0.25% of the non-utilized OD limit or Rs. 1250 whichever is higher (plus taxes and any other applicable statutory dues).|
|Quarterly minimum OD Limit utilization threshold: 50%|
|E.g. OD Limit : Rs. 50,00,000|
|OD threshold for Utilization (50% of OD Limit) : Rs. 25,00,000|
|OD Limit Utilized : Rs. 10,00,000|
|Differential : Rs. 15,00,000|
|Charges : Rs. 3750 (0.25% of Rs. 15,00,000)|
|Overline rate/Penal interest in case of overline accounts||Overwithdrawal||3% (plus taxes and any other applicable statutory dues) per month over and above normal OD rate.|
|This would be charged on the amount over the above OD limit.|
|• Stamp Duty on Loan Agreement, Overdraft Agreement, Guarantor Agreement, Registration Charges etc. varies from State to State. Stamping/Notarisation of RBI and other Affidavits as applicable.|
|• Charges for other Services would be specified as applicable when the Customer applies for those services and the same shall be payable by the borrower alone e.g. Revalidation of Sanction, Change in Property, Reschedulement of Loan, Change in EMI Date, Solvency Charges etc.|
|• Taxes/ other statutory levies may be charged to the Borrower if applicable as per Government/ RBI directives.|
Click here to refer to the General Schedule of Features and Charges (GSFC) for your Home Loan (revised w.e.f. July 15, 2022).
Home loan processing fee is a charge that the applicant pays during the home loan application. However, there is not only one type of home loan but more than one, and each comes with different home loan processing fees and other charges. Let's take a look at these home loans and the charges they come with.
Home renovation loan is used to specifically upgrade your home, be it redecorating or repairing. It can be used for both. The home loan processing fee that the bank charges for this type of loan ranges from 0.25 % to 2.00 %. No prepayment charges are levied in this type of home loan.
Home loan balance transfer facility is used when borrowers are paying a high interest rate on their existing home loan and wish to switch to another bank offering lower interest rate and a better home loan deal. The home loan processing charges in this type of home loan can go up to 6 %. Foreclosure charges for floating rates are nil, but for fixed-rate one has to pay 4 % of the principal outstanding.
A home construction loan provides the borrowers with funds to build a house. The home loan processing fees for this type of home loan can go up to 2 %, and the borrower doesn’t have to pay any prepayment on the floating interest rate, but for the fixed interest rate, it depends on the lender.
The processing fees generally start at 0.35 % and goes up to 3 %.
Home loan processing fees are non-refundable charges that you have to pay at the time of your home loan application. These are the charges towards the services provided by the lender. Each financial institution has a different processing fee for home loan. Kotak Mahindra Bank charges 0.5 % processing fee for salaried and 1 % for self-employed applicants. This is among the lowest home loan processing fee in India.
In the absence of salary slips, especially for non-salaried individuals, applicants may submit bank statements and complete ITR details as required by the lending bank. So, although salary slips improve your chances to get a home loan, it’s not mandatory
No, the home loan processing charges are non-refundable in nature. It means, that if the bank rejects a loan application, the amount will not be refunded. That being said Kotak Mahindra Bank’s home loan processing fee is among the lowest. For a salaried applicant, it is 0.5 %, while for a self-employed applicant it is 1 %.
The processing fee for home loan is a percentage charged on the loan amount that you have applied for. You have to pay it during the time of the application. These home loan processing fees are non-refundable, i.e. the bank will not refund the amount, whether the loan application is approved or not.
No, the applicant has to pay a processing fee at the time of the home loan application. It is a percentage of the principal loan that you have applied for and is non-refundable. However, with Kotak Mahindra Bank you have to pay only a minimal home loan processing fee, i.e., 0.5 % for salaried and 1 % for self-employed applicants.
To process your home loan application, the bank charges a non-refundable processing fee. Every financial institution charges its own home loan processing fee while applying for a loan or for a home loan balance transfer. Kotak Mahindra Bank offers one of the lowest home loan processing fees; 0.5 % for salaried and 1 % for self-employed applicants.
When you pay all of your monthly installments before the end of the tenure, it is called foreclosure. On foreclosing the loan, the bank levies a charge on the applicant that they have to pay to foreclose the loan. These charges depend on the bank that has sanctioned the loan. Foreclosure charges are a part of the various types of home loan processing fees that a bank charges.
Unlike a foreclosure, a prepayment is when you pay a part of the outstanding home loan amount in advance. The prepayment charge varies from bank to bank, and also on the type of applicant who has taken the loan. One of the home loan processing charges, prepayment of your loan comes at a cost. So, before going for it, best is to understand how much amount you have to pay.
The home loan processing fee is paid by the borrowers at the time of their home loan application. After this, there are various fees and charges that one might have to pay. For example, when you need copies of any loan-related documents or in case of prepayments and foreclosures or even penalties are all included in the home loan processing charges.
The home loan processing fees and charges to be paid when borrowing a loan from Kotak Mahindra Bank are as follows:
An 18 % GST is charged on the home loan processing fee. Kotak Mahindra Bank charges a processing fee of 0.5 % in the case of salaried professionals, while for non-salaried individuals it is 1 %. This is a non-refundable charge that the applicant has to pay at the time of loan application.
The mortgagor pledges their property's title deeds or ownership documents as collateral security for the equitable mortgage and registered mortgage to the mortgagee or their agents while availing a loan. While equitable mortgage stamp duty may not always be required, increasing instances of housing loan fraud have led several states to make registration mandatory to ensure excellent protection for both parties involved.
What is the meaning of equitable mortgage? Also known as Mortgage by deposit of title deeds, it is a process where a borrower deposits their property's title deed with the lender as security for a loan until it is repaid. Equitable mortgage charges create a charge on the property without the need for legal procedures. Although no written documentation is required, an agreement signed by both parties and notarized is necessary.
The Limitation Act sets the time frame for an equitable mortgage at 12 years under Article 62. This means the lender has up to 12 years to take legal action against the borrower in case of default.
To create a home loan mortgage registration, the borrower provides the lender with the title deed of immovable property as security until the loan is fully repaid. This does not involve any legal process, but a memorandum of deposit of title deeds is usually executed between both parties to formalise the arrangement.
Disclaimer (Things you should know):
For loans: Credit at the sole discretion of the Bank and subject to guidelines issued by RBI from time to time. Bank may engage the services of marketing agents for the purpose of sourcing loan assets.
* Rs. 5,000 Flat processing fee applicable for women applicants.