Loan Against Property Fees and Charges

A Loan Against Property is a secured form of loan. Under this loan category, a borrower pledges their property as a collateral in return for a loan. The ownership rights of the property stay with the borrower. However, the lender gets the right to sell the property for loan recovery in case of loan default. Read on to learn various types of fees and charges for Loans Against Property. 

Different Types of Fees and Charges on Your Loan Against Property 

When you apply for a Loan Against Property, know that the mortgage loan processing fee is not the only fee you will be required to pay. Let us look at the various fees and charges typically applicable in the case of a Loan Against Property.    

Mortgage Loan Processing Fee

Not considering the mortgaging loan processing fee while analysing the cost of borrowing can be a miss while calculating the overall cost of the loan. The Loan Against Property processing fee is a one-time fee that borrowers have to pay when they avail of a Loan Against Property or mortgage loan. Bajaj Housing Finance charges a processing fee of 4% of the total loan value plus the GST, as applicable.    

Legal Charges

Loans Against Property involve a substantial amount and lenders sanction these loans only after verifying all the documents. Lenders can hire lawyers to verify paperwork and borrowers may have to bear the fees involved in it.

Secure Fees

Lenders may apply this fee and use it to enhance the security of your loan account. For instance, most lenders allow borrowers to manage their accounts online. Through this online facility, borrowers can make overdue payments, check transaction statements, obtain NOC and do a lot more through their online loan account. The Secure Fee is the fee that a lender applies to protect the security of a borrower's account.  

Penal Charges or Late Fee

Penal charges or late fee is the fee that a lender charges a borrower in case of missed EMI payments. 

Borrowers should make all payments on time. Late EMI payments not only attract a late fee but can also negatively impact a borrower's credit rating and reduce their chances of getting approved for another loan in the future.  

Part-Prepayment and Foreclosure Charges

Part-prepayment and foreclosure charges on loans against property are charges that a lender applies when borrowers decide to close their loan before the stipulated tenure by either prepaying a small amount or the entire loan value.  

Before signing the loan against the property agreement, check the documents for foreclosure and prepayment charges. You should be able to close the loan whenever you want without paying any fee.  

Also Read: Tips to Manage Loan Against Property Repayments Efficiently 

EMI Bounce Charges

If you owe any amount to someone and you pay it via a cheque and the cheque gets bounced, your bank will apply a cheque bounce charge. Similarly, during your loan repayment tenure, if your EMI gets bounced because of insufficient funds in your linked bank account, your lender may levy an EMI bounce charge.

Final Words

If you plan to take a Loan Against Property, you should be aware of the various charges that are involved with it. Being aware of these charges can help you plan your finances in advance.

Also Read: Benefits of Loan Against Property Over Collateral-free Loans