Easy home loan options have brought homeownership within reach of every average Indian citizen, even in an expensive and luxurious city like Bengaluru. However, for a hassle-free loan repayment experience, it is crucial to be aware of the total cost of taking a home loan, which is not limited to the home loan interest. This guide will let you know all charges involved in taking a home loan in Bengaluru so that you can make an informed choice.
The most obvious payment you need to make towards your home loan is that of the home loan interest. This amount will vary depending upon the interest rate charged by your lender and your credit profile. So, try to maintain a good CIBIL score and compare lenders to choose the one offering competitive home loan interest rates.
Besides the interest, applying for a home loan online or offline will accompany the following underlying fees and charges –
- Processing fee
When you apply for home loan, you will need to pay a certain fee at the time of application submission known as the processing fee. This is a one-time fee charged for application processing. The processing fee of housing loan is non-refundable even if your application is rejected.
- Legal charges
Home loans accompany a comprehensive set of documents that your lender needs to verify to sanction your loan. Once you submit the documents on actuals, they will be sent for legal verification. This verification process accompanies certain charges known as legal charges.
Additional Charges Involved
Besides the ones mentioned above, other charges are also involved under housing loans, applicable on a case-to-case basis –
- Delayed EMI payments
For whatever reasons, if you fail to pay your home loan EMIs faithfully, your lender will charge a specific penalty for the same. Use a free, online home loan calculator such as the home loan EMI calculator to determine affordability beforehand since defaulting can hamper your credit rating.
- Foreclosure charges
Often, borrowers may end up paying their entire home loan amount inclusive of interest before the end of the term (in a lump sum). In such cases, the lender will charge a penalty known as foreclosure charges.
- Collection agency charges
Lenders may hire specialised organisations to pursue payments from individuals on actuals. These dedicated debt collectors will usually charge a percentage of the total amount owed in the form of a fee. The same will be charged from the home loan applicant.
- Loan cancellation charges
If you wish to opt-out of your home loan after the process of loan disbursement, the lender will cancel your loan but levy a charge for the same called loan cancellation charges.
- Cheque bounce charges
If you miss an EMI payment on your housing loan due to insufficiency of funds, the lender will levy charges known as cheque bounce charges. To avoid EMI defaults, you can plan your monthly instalments optimally by using an EMI calculator for home loan.
Finally, a home loan may accompany certain other miscellaneous charges such as CERSAI charges (in case of loans against property), PDC swapping charges (if the payee wants to switch bank accounts), account maintenance charges, rejection of Electronic Clearance Service (ECS) charges, home loan balance transfer charges (if any), etc.
Besides knowing your EMI in advance, make sure to use the online home loan eligibility calculator to know your home loan eligibility. Compare between lenders for the most competitive home loan rates and keep a spot-free credit record. Prepare the right way, and the home loan repayment process will become entirely hassle-free for you.