Top News

If you want to take out a bank loan, it's crucial to be aware of several important factors, including the processing fees of private and non-private banks.

Home Loan : Everyone dreams of owning their own home. You save for it, but sometimes, due to a lack of funds, you have to turn to the bank. Banks are instrumental in helping you realize your dream of owning a home. However, it's crucial to repay your home loan on time. If you plan to take out a home loan, you should first understand some important factors, such as the latest bank home loan interest rates, repayment period, processing fees, and other mandatory charges that must be paid on time. If you plan to take out a home loan of ₹25 lakh, which you plan to repay over a 20-year period, let's explore the most important things you should know.

Home Loan: First check home loan offers

Different banks across the country offer home loans to their customers at varying interest rates. Therefore, if you are planning to purchase a home with a home loan, you should choose a bank with low home loan interest rates.

Home Loan: Application Charges

You pay this fee whenever you apply for a loan. Even if you don't get the loan, this fee is non-refundable. Therefore, consult your financial expert before applying for a home loan. Before applying, you should ensure which bank or financial institution you want to borrow from.

Home Loan: Mortgage Deed Charges

The mortgage deed charge is one of the most significant considerations when selecting a home loan. It is charged as a percentage of the home loan. However, many banks and NBFCs waive this charge.

Home Loan: Legal Fees

After the borrower applies, the bank or institution hires an external lawyer. The lawyer investigates the borrower's property and legal status. The lawyer's fees are paid by the client. To save on legal fees, you should first find out whether the project you are investing in has received approval from any bank or financial institution.

Home Loan: Prepayment Charges

Sometimes, to prepay a loan, a portion of the loan is paid off early. This is called prepayment. In this situation, the bank charges a prepayment fee or penalty to cover its costs and interest rate losses. These charges vary across banks and financial institutions, and they also depend on the type of loan.

Home Loan: Commitment Fee

Many banks charge customers a commitment fee. This fee is charged if the customer fails to repay the loan within the stipulated time period. This fee is typically charged on undisbursed loans.

Home Loan: Smart Tips for Home Loan

• Before applying for a loan, you must compare the interest rates and facilities of various banks or financial institutions.
• Always take a loan that fits your budget, as taking a loan for a large amount could create difficulties in repaying it.
• Before applying for a loan, always calculate the interest rate and savings, so that you don't face financial difficulties later due to the increasing loan burden.
• Before signing the loan agreement, carefully read the loan terms and conditions. If you don't understand any of the terms or need to change them, make sure to do so in a timely manner.

Home Loan: Processing Fee

• The processing fee for a ₹25 lakh home loan in HDFC Bank is typically 0.50% of the loan amount (i.e. approximately ₹12,500 + GST).
• Processing fees for a ₹25 lakh home loan at ICICI Bank typically range from 0.5% to 2% of the loan amount. At 0.5% on ₹25 lakh, this can range from approximately ₹12,500 + GST to ₹50,000 + GST at 2%.
• Canara Bank at ₹25 lakhProcessing Fees This could be around ₹10,000 + GST (18%) = ₹11,800.

(Note that the processing fee is subject to change from time to time as per the bank's rules. For more details, please check the official website of the concerned bank.)

Home Loan: Know here the home loan interest rates of 10 big banks

Bank Name	interest rate per annum	Duration	I
HDFC Bank	7.75%	25 years	₹20,524 per month
Canara Bank	Between 7.40% to 8.90%	25 years	20,000 to 22,500 rupees per month
Kotak Mahindra Bank	Between 7.70% to 8.70%	25 years	₹20,000– ₹22,000 per month
Axis Bank	Between 8.40% to 8.50%	25 years	21,500 to 22,500 rupees per month
SBI	Between 8.40% to 8.50%	25 years	21,500 to 21,650 rupees per month
ICICI Bank	Between 8.50% to 10.05%	25 years	21,700 to 24,200 rupees per month
PNB	8.50%	25 years	₹21,696 per month
Bank of Baroda	8.35%	25 years	₹21,459 per month
Aadhar Housing Finance Limited	Between 12% - 15%	25 years	27,500 to 33,000 rupees per month
LIC Housing Finance Limited	8.5% to 9%	25 years	₹21,696 - ₹22,493 per month

(Image Credit-iStock)