Today, most people are opting to avail a loan from banks and other financial institutions to purchase a new house. One reason is that property prices are high and most people can’t afford the entire amount upfront. Secondly, getting a home loan nowadays is quite quick and hassle-free as long as you meet all the lender’s requirements. All aspiring home buyers need to do is to compare the home loan deals offered by different lenders, and choose the one that suits their preference. Once the lender is finalized, the loan borrowers need to apply for the loan by filling up the lending institution’s loan application form. Thereafter, the lender starts processing the application. During this process, until the loan amount (full or part) is disbursed, there will be occasions when the borrower needs to pay certain home loan processing fees.
What are Loan Processing Fees?
The house loan processing fees, which are also called settlement or closing costs, are additional costs that borrowers need to pay for different purposes, including loan initiation, title pursuit and insurance, loan discount points, loan appraisal, recording charges, and Home Owner’s Association (HOA) fees. These are the charges that cover the processing of the loan, protection against title difficulties, assurance of property value, and other services. The fees that may be levied for these purposes may vary based on the loan type, region, and lender. Thus, borrowers also need to do thorough research and comparison of the fees imposed by different lending institutions, beforehand.
Sugested read: Home Loan Processing Time
For example, the SBI home loan processing fee is about 0.4% of the loan amount with the minimum processing amount being ₹10,000. On the other hand, the HDFC home loan processing fee is 0.5% of the loan with the minimum amount being ₹3,000. There are instances, especially during festive occasions, when lenders may waive these processing fees on home loans.
Here is the list of Home Loan Processing Fees of All Banks/NBFC in India 2024
| Bank/ NBFC | Processing fee (% of the loan amount) |
|---|---|
| SBI Home Loan | Clean Overdraft: No charges. SBI Pension Loan: 1% or Rs.1000-10000 Plus GST. Jai Jawan Pension Loan: No charges. Xpress Credit: 1.50% or Rs.1000-15000 Plus GST. LOGIN Fee – Rs.5900/- |
| ICICI Bank Home Loan | Rs.2999 + GST |
| Bank of Baroda Home Loan | No processing fee; discounted upfront fee |
| HDFC Home Loan | Up to 0.50% or Rs.3000 Plus taxes, whichever is higher. Minimum retention: 50% or Rs.3000 Plus taxes, whichever is higher. |
| Kotak Mahindra Home Loan | Rs.11,800/- fix |
| Axis Bank Home Loan | Up to 1% of the loan amount Minimum of ₹10,000 |
| Deutsche Bank Home Loan | Up to 1% of the loan amount |
| IDBI Home Loan | Variable on case to case basis. NIL for BT and Top Up |
| Union Bank of India | 0.50% of the loan amount Maximum of ₹15,000 + tax as applicable |
| Bank of Maharashtra | Nil |
| Indian Overseas Bank | Up to 0.50% of the loan amount Maximum of ₹25,000 |
| Bank of India Home Loan | Up to 0.50% of the loan amount Minimum of ₹1,500 Maximum of ₹50,000 |
| Central Bank of India | 0.50% up to Rs.20,000 Plus GST (waived till 31 March 2024) |
| Indian Bank | 0.23% – 0.40% of the loan amount Maximum of ₹50,000 |
| Yes Bank Home Loan | 1.5% of the loan amount plus GST or Rs.10,000, whichever is higher |
| LIC Housing | Loan Up to ₹2 Crore: 0.25% + applicable tax Loan above ₹2 Crore: 0.35% + applicable tax |
| RBL Home Loan | 1.5% of the loan amount |
| IDFC Home Loan | Rs.3540/- fix . |
| Fullerton Grihashakti | Up to 0.25% of the loan amount |
| Aditya Birla Capital Home Finance | Up to 1% of the loan amount |
| Federal Bank | 0.50% of the loan amount Minimum of ₹3,000 – ₹7,500 |
| Canara Bank | 0.50% of the loan amount Minimum of ₹1,500 Maximum of ₹10,000 |
| Tata Capital Home Loan | Starts from 0.5% of the loan amount + GST |
| Bajaj Finserv Home Loan | Up to 0.5% of the loan amount |
| Aadhaar Housing | 0.50% of the loan amount + applicable GST |
| Repko Home Finance | 1 % of the loan amount |
| PNB Housing Home Loan | Up to 1.00% |
Besides these processing fees, there are some other charges that borrowers are required to pay.
Suggested read: Housing Finance Companies in India
Add-on charges for Home Loan by Banks and NBFCs
1. Application / Administrative Fee
Applicable to all loans application, the application or administrative fee is a one-time fee and is non-refundable. The fee in this case can vary from ₹2,500 to ₹7,000. In certain approved cases, this amount may get adjusted with the processing fee.
2. Document Verification Fee
This is the fee that loan borrowers need to pay for certifying the authenticity of their documents, including official identification documents, address proof, income, etc.
3. Valuation Fee
The valuation fee is charged for ascertaining the valuation of a property and its worth in the market. This fee is usually dependent on the value of the property. It varies from one lender to the other.
4. Technical and Legal Verification Fee
This is the fee charged for document verification of the property regarding its legal and technical aspects. However, this charge may vary on the property’s location and complexity.
5. Registration Charges and Stamp Duty
The registration charges and stamp duty are the fees levied by the government on the property registration papers. This fee varies from one Indian state to the other.
6. Agreement Copy Fee
The house agreement copy fee may be levied by the lender, and it could be a maximum of up to ₹500.
7. Issuance Charge for Photocopy of Title Documents
A maximum charge of up to ₹1,000 may be charged for a copy of property documents.
8. Foreclosure Fee
In case of foreclosure of a loan before the tenure, banks or financial institutions may charge a fee. This is waived off in cases of variable home loan interest rates. The consideration of this fee differs from bank to bank and also on the remaining term of the loan.
9. Income Tax Certificate Fee
This fee can be up to ₹500 but most banks do not charge it.
10. Interest Certificate Fee
The fee for issuing a certificate of interest payment by the bank can be a maximum of up to ₹500.
11. NOC/NDC Fee
No Objection Certificate (NOC) or No Dues Certificate (NDC) fee can be NIL or up to ₹500. These certificates are required as proof of successful completion of the loan. For a duplicate NOC or NDC, the charge may be between ₹100 to ₹500 per request.
So, anyone planning to apply for a home loan needs to be clear about the additional expenses that may arise during the loan approval process or later so that he or she can keep these fees into account to avoid last-minute hassles.
