Last Updated on May 24, 2022 by
Getting a home loan entails more than paying the EMIs. Apart from the loan amount, borrowers have to pay several other charges, some fixed and some a percentage of the loan sum. The charges typically vary across lenders (banks, NBFCs, or housing finance companies). Since these charges add to the home loan’s total cost, the borrower must know about them. Let us dive right in!
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20 charges you have to pay if you avail of a home loan
Following are the several charges you have to pay if ever you decide to avail of a home loan:
Home loan processing fee
The lender charges a processing fee to cover the verification and assessment costs related to evaluating the home loan application. It is a one-time fee that you have to pay upfront to the lender. While some lenders have a flat processing fee, others may charge a fee of up to 2% of the home loan amount. Few lenders have zero processing fees as well.
Login fee
It is a non-refundable fee some lenders charge even before approval of the home loan. You have to pay the processing fee minus the login fee upon loan approval. It typically ranges between Rs. 2,500 to Rs. 6,500 and is commonly known as administrative or application fee.
Prepayment charge
You have to pay this fee if you pay off the entire home loan amount before the end of your tenure. It ranges between 2-6% of the outstanding amount. However, the fee does not usually apply to individual borrowers and floating-rate loans.
Conversion charge
A conversion charge or switching fee is applicable if you convert your fixed-rate package to a floating rate and vice versa. It can range between 0.25-3% of the balance amount or the lender may fix an amount. Conversion charge also applies if you convert your current floating-rate package to a revised one.
Penal interest rate
You have to pay a late fee if you delay your EMI payments. The fee ranges between 2-3% of the delayed amount each month until you fulfil the payment.
NDC/NOC charge
You have to pay a fee to get an NDC (No Dues Certificate) or NOC (No Objection Certificate). The fee may range from zero to Rs. 500 per request. Also, the cost of revalidation of the NOC by the bank can be around Rs. 100 to Rs. 500. A similar fee range applies to duplicate NOC or NDC.
Agreement copy fee
It is the fee you have to pay to the bank if you want a copy of the loan agreement. The fee ranges from zero to Rs. 500.
Interest certificate charge
You have to pay a fee in exchange for a certificate of the interest amount you paid while repaying the loan. The fee can range from zero to Rs. 500 per request.
Income tax certificate charge
It is the charge banks levy for providing the final or provisional income tax certificate towards your home loan principal repayment and interest. The fee can range from zero to Rs. 500 each time you request a certificate.
Charge for issuance of photocopy of title documents
You have to pay anything between 0 to Rs. 1,000 for each request for a photocopy of your property’s title documents. The bank keeps the originals until you completely repay the loan.
Credit score report charge
Your credit score will decide if the lender approves your home loan request. So, if you want to assess your prospects, you may request the bank to issue a copy of the credit report. The charge may vary between zero to Rs. 1,000 per request.
Fee for changing home loan tenure
You may wish to change the loan repayment tenure due to financial stress or any reason. In that case, the bank will charge a fee for extending the tenure. The same applies if you wish to reduce the term.
Fee for issuance of amortisation schedule
You have to pay between zero to Rs. 250 every time you seek your loan tenure’s detailed amortisation schedule.
Home loan account statement charge
If you need a copy of your loan account statement, you may have to pay zero to Rs. 250 per request. It is also known as the Statement of Account Issuance fee.
Document retrieval charge
Upon loan closure, you have to pay between Rs.500 to Rs. 5,000 to get back all the original property documents back from the lender.
Legal charges
Assessing the legal validity of sale deeds and creating home loan agreements involves certain legal expenses that you may have to pay in the form of legal fees. The fee typically depends on the amount charged by the lawyer or legal advisor.
Inspection charge
The inspection charge is a fee the bank levies for the legal inspection and valuation of the property you are buying. The fee you have to pay depends on the actual charges the lender incurs.
MoD charge
A Memorandum of Deposit of Title Deed (MoD or MODT) is proof that your property’s ownership papers are with the bank as collateral. It comes in a non-judicial stamp paper, and the fee for the same varies across states.
Stamp duty and registration charge
As per state laws, registration of the MODT incurs stamp duty and registration charges. The charges vary across states and are usually 0.10-0.20% of the loan amount.
CERSAI charge
You pledge your property as collateral with a bank/financial institution when you purchase the property by applying for a home loan. It requires registration with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). The registration draws a charge of Rs. 50 to Rs. 500.
Conclusion
When you apply for a home loan, the last thing you’d want is the sheer number of hidden charges catching you unaware. Acquaint yourself with the fees you need to pay before and after loan approval. However, since charges vary with borrowers, ensure that you study your loan documents carefully before finalising the deal.
