Know the Types of Housing Loan Charges

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3 Min 22 Jan 2024

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Home Loan Charges
Types of Home Loan Charges

Home Loan Charges

Availing of a Home Loan can have several benefits such as tax exemptions. However, there are certain charges associated with a Home Loan that you should get acquainted with to avoid surprises. Proceed with your chosen Home Loan lender keeping in mind additional charges and your requirements.

Below is a compilation of the different types of Home Loan charges you may have to pay during and after availing of a Home Loan.

Different Types of Home Loan Fees and Charges

If you are planning to avail of a Housing Loan, the following are the associated charges for a Home Loan you may be required to pay.

Loan Processing Fee

The Home Loan processing fee is an important and one-time charge levied by your lender at the time of approving your Home Loan. It is a percentage of your loan amount, which varies from lender to lender.

Bajaj Housing Finance charges a processing fee of up to 4% + GST as applicable.

EMI Bounce Charges

Borrowers may have to pay the bounce charge if an EMI amount is missed or bounced due to any reason.

Late Payment Charges

If there is a delay in your EMI payment, your lender may charge you a late payment fee.

It is advisable to use online tools such as a Home Loan EMI Calculator to plan your finances in advance, which can help you avoid any late payment fees.

What is the Difference between Fixed Rate and Floating Interest Rate?

The interest rate is a rate applicable on the Home Loan principal amount; your lender levies this charge as the cost of borrowing. There are two types of interest rates, namely fixed rate and floating rate. To learn more about these two interest rates, read on.

Fixed Interest Rate

As the name suggests, this type of Home Loan interest rate does not change until reset by the lender on a predetermined date. The change in rate is agreed upon between the lender and the borrower before the loan sanctioning.

Floating Interest Rate

Floating interest rate Home Loans offer more fluidity in terms of the interest component. The interest rate depends on several factors, including either an internal or an external benchmark, which moves higher or lower, depending on market factors.t

In conclusion, understanding the various charges associated with a Home Loan is important for informed financial planning. Whether it is the one-time processing fee, EMI bounce charges, or late payment fees, being aware of these costs can help borrowers manage their finances effectively.

Read Also: Different Types of Home Loans

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