When you raise a personal loan, banks tend to charge what are known as processing charges. This is generally a small amount which the borrower has to pay to the lender for processing of loan. These charges are deducted from the loan amount and only the reduced amount (loan minus processing charges) is disbursed to the borrower.
It is significant to make note of processing charges because it is an additional cost and reduces the cash you receive in form of loan disbursal after the bank approves the loan. Here we list out the processing charges charged by different banks.
Following 6 banks levy these processing charges on personal loan
I. HDFC Bank: The largest private bank charges up to ₹6,500 plus goods and services tax (GST).
II. ICICI Bank: This private bank charges upto 2 percent of the loan amount as processing charges.
III. Kotak Mahindra Bank: The charges levied by this private bank are very high i.e., 5 percent of the loan amount plus taxes.
IV. Punjab National Bank (PNB): This state lender charges 1 percent of loan amount in form of processing charges from general public. For defence personnel, there are no charges.
V. IDFC Bank: This private bank charges 2 percent of the total loan amount as processing fee from borrowers.
VI. State Bank of India (SBI): Last but not the least, State Bank of India (SBI) levies 1.50 percent of the loan amount as processing charges with a minimum of ₹1,000 (plus GST) and a maximum of ₹15,000 (plus GST).
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