Personal loan processing fee ranges from 0.5% of loan amount to 4% for loan amounts of up to Rs 40 lakh. Some banks/NBFCs waive off the processing fee during special festive offers. PSU Banks usually charge lesser processing fee as compared to Private Sector Banks.
Processing Fees and Charges Offered by Top Lenders in India
| Name of Lender | Processing Charges (% of loan amount) |
| HDFC Bank | Up to Rs 6,500 |
| Tata Capital Limited | Up to 5.5% of the loan amount |
| ICICI Bank | Up to 2% of the loan amount |
| State Bank of India | NIL |
| Axis Bank | Up to 2% of the loan amount |
| Kotak Mahindra Bank | Up to 5% of the loan amount |
| IDFC First Bank | Up to 2% of the loan amount |
| IndusInd Bank | Up to 3.5% of the loan amount |
Note: Charges as of 17 January 2025
Important Fees and Charges of Personal Loan
Processing Fee
The processing fee is the total cost charged per online transaction. It is generally a certain percentage of the loan amount charged to cover the administrative costs of processing the application of the borrower or prospective resident. The processing fee charged by lenders can go up to 4% of the loan. However, some banks/NBFCs have capped the processing fee amount, irrespective of the loan amount.
Pre-payment Charges
Pre-payment charge is charged by banks/NBFCs when the borrower prepays part of the loan amount. However, lenders have been barred by the RBI to levy pre-payment fee on personal loan lent on floating interest rates.
Also Know: Is there any prepayment penalty for personal loan?
Foreclosure Charges
This penalty is charged by the borrower in case he/she closes the loan account before the completion of loan tenure. Some lenders do not allow foreclosure of the loan account until the repayment of a pre-determined number of EMIs. This does not hold true for floating interest rates. As with prepayment charges, lenders have been barred by the RBI to levy foreclosure fee on floating interest rates for personal loan.
Loan Cancellation Charges
Some applicants might wish to cancel the loan amount after it has been sanction or disbursed. A loan cancellation fee is to be paid by the applicant, which varies for different banks/NBFCs. Loan cancellation fee of Rs 1,000 is usually charged per event.
Cheque Dishonour Charges
A certain amount is charged from the personal loan borrower in case the cheque deposited by him/her bounces. This amount can go up to Rs 450 per instance, which might vary for different lenders. Some lenders may also charge higher cheque dishonour charges on the repeated instance of cheque dishonours.
FAQs on Personal Loan Fees
What is the processing fee for personal loan?
The processing fee for personal loans ranges from 0.5% of the loan amount to 4% for loan amounts of up to Rs 40 lakhs. Some lenders waive off or reduce processing fees as part of their festive loan offers.
What are the standard fees and charges for personal loans in India?
Banks and NBFCs usually charge processing fees, documentation charges and login fees during the loan processing and disbursal stages. Other fees charged during the loan tenure are usually incidental or requirement-based, such as loan cancellation fees, stamp duty, prepayment/foreclosure charges, penal charges, and EMI cheque bounce fees, depending on the personal loan scheme. Other charges may include verification, duplicate statements and NOC certificate charges.
Do all Indian banks and NBFCs charge GST on personal loan fees and interest?
GST is not charged on the interest amount of personal loans. However, a GST of 18% is levied on the various personal loan fees and charges levied by the lenders.
