Lowest Processing Fee (0%) on Home Loan

With rising property prices, home loan is the only solution when you want to achieve your dream of owning a home. And there is no dearth of home loan providers in India. You can get home loan for various purpose such as:

  • House construction
  • House (new or old) /land purchase
  • Home improvement/renovation
  • Home extension

However borrowers have to pay various other charges apart from the interest rate. Amongst them, processing fee is one such extra cost.

What is a home loan processing fee?

Every home loan application goes through a detailed evaluation before final approval. All these involve manual human intervention. So to cover up the cost, lender charge a processing fee.

It is a fee which is charged by the housing loan providers and may include multiple charges – legal, administration, application, technical evaluation and others.

This fee varies for each lender and there is a minimum and maximum fee applicable. Typically lenders take 7 -15 working days to process any application.

Listed in the below table is the processing fee (minimum fee – lowest to highest) charged by various home loan providers in India.

Name of Lender% Processing Fees of the loan amountMinimum Fee (Rs.) excluding taxes
State Bank of India for all Central / State Govt. Employees0Nil
Punjab National Bank - Government Employees0Nil
Syndicate Bank - SYNDKUTEER SCHEME0Nil
Allahabad Bank for pensioners0Nil
Bank of Maharashtra (Waived off from 10Oct2016 to 31Dec20160Nil
Central Bank of India - Cent Home Loan PlusNARs. 500
Jammu and Kashmir Bank0.25Rs. 500
Corporation Bank - GHAR SHOBHA0.5Rs. 1000
UCO Bank - Pre Approved Home Loan0.25Rs. 1000
UCO Bank - Home Loan0.5Rs. 1500
UCO Bank - Top-Up Home Loan0.1Rs. 1500
Canara Bank0.5Rs. 1500
State Bank of India0.35Rs. 2000
ICICI Bank0.50% - 1.00% Rs. 2000
ICICI Home Finance0.50% - 1.00% Rs. 2000
Vijaya Bank - Upto Rs. 10 LakhNARs. 2000
HDFC (home loan, renovation, extension, plot, )0.5Rs. 3000
Allahabad Bank (other housing loan products)0.31% - 1.22%Rs. 3070
Karur Vysya BankNARs. 3500
Vijaya Bank - Above Rs. 10 LakhNARs. 4000
Dewan Housing Finance LimitedNARs. 5000
IndiaBulls Housing FinanceNARs. 10000
Axis BankUpto 1%Rs. 10000
YES Bank0.5Rs. 10000
Central Bank of India - Cent Home Loan Scheme0.5NA
Corporation Bank - GHAR SANSAR1NA
Dena Bank0.5NA
Indian Bank1.173NA
Indian Overseas Bank0.53NA
Oriental Bank of Commerce0.5NA
Punjab National Bank - General Public0.5NA
Catholic Syrian Bank0.5NA
Tamilnad Mercantile Bank0.5NA
L&T Housing Finance0.25NA

Note: In the above table NA denoted Not Available. You need to check with the bank to know the % fee.

Processing fee depends on the loan amount and purpose of loan (new house, renovation etc.). And higher the loan amount, higher would be the fee.

Remember that, in case the application gets rejected, not every lender will refund the processing fee. Only a certain percentage of fees is refunded. So it is best to get this clarified and get in written before giving money for further processing of the loan.

Additional reading – Tips on getting home loan easily.

One very important point to remember is that post Goods and Service Tax (GST) implementation; borrowers will have to pay marginally extra money. Earlier 15% service tax was applied on the processing fee. But after GST, the rate has gone up by 3% and borrowers will now have to pay a tax of 18%.

In addition to the processing fee, lenders also levy various other charges depending on the purpose of home loan (as mentioned above) taken. These charges further increases the burden on the borrowers.

Here are few of the charges/fees applied on home loan:

  • Bounce charges
  • Penal charges
  • Foreclosure charges
  • Pre-payment charges
  • Converting interest rate from fixed to floating and vice-versa
  • Cancellation of loan
  • Advocate’s fee
  • Valuer’s fee
  • Stamp duty
  • Loan transfer fee from one lender to another (most offer this free of cost)
  • Prepayment statement
  • Duplicate NOC
  • Revalidation of NOC

Remember that your loan selection criteria should not be dependent only on the interest rate. The above listed extra costs also need to be considered to calculate the overall money outflow. There might be more additional fees as well, which you need to check with the lender before finalizing. But the above listed ones are most commonly charged.

Home loan is considered to be the most risky for any lender even though the lenders keep the applicant’s asset mortgaged with them. And in case of non-payment of EMIs; lenders have legal right to take any action on the said property and recover their money. And if this situation arises, your total loss would actually be very high considering the fact that you have paid interest and other rates and most importantly the loss of property.

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