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3 Min 27 Jun 2022
types of home loan charges
Highlights
  • Home Loan Charges
  • Different Types of Home Loan Charges
  • Difference Between Fixed and Floating interest rate

Home Loan Charges

Availing of a Home Loan helps you reap several benefits. However, there are certain charges associated with a Home Loan that you should get acquainted with to avoid expensive surprises. You should proceed with your chosen Home Loan lender bearing in mind the additional charges and your requirements.

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

Different Types of Home Loan Charges

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

Loan Processing Fee

The Home Loan process fee is an important and one-time charge levied by your lender at the time of approving your Home Loan. It is a small percentage of your loan amount, which varies from lender to lender. Most lenders charge a processing fee starting from 0.35%, going up to 4% + GST as applicable. . 

Conversion Fee

Borrowers may have to pay conversion fees when they transfer their existing Home Loan to another interest rate within the same bank. This typically occurs when existing borrowers want to move to a lower interest rate on their Home Loans.

Late Payment Charges

If there is a delay in your EMI payment, your lender is liable to charge you a late payment fee. You may have to pay about 24% per annum in addition to the applicable interest rate on the overdue amount as a penalty. Calculate your monthly Home Loan EMI with ease using our Home Loan EMI calculator. Plan your budget and make informed decisions.

Read More:Everything About Home Loan Refinancing

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

​An interest rate is a charge levied by the lender on the Home Loan principal amount, as a cost of borrowing. Traditionally, two types of interest rates are offered on Home Loans, 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 through the repayment tenor. A fixed interest rate is agreed upon between the lender and the borrower before the loan sanctioning. Borrowers can opt for a fixed interest rate to avoid the risks associated with floating interest rates, wherein the rate fluctuates basis the benchmark rate. 

Floating Interest Rate

Floating interest rate Home Loans offer more fluidity in terms of the interest component. The interest rate is pegged on several factors, including either an internal or an external benchmark, which allows it to move higher or lower, depending on market factors.

Read Also: Different Types of Home Loans 

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