Processing fees is an important cost factor while you are evaluating your Mortgage loan options. Like they say nothing comes free in this world. When you apply for mortgage loan like a home loan processing fees, loan against property or lease rental discounting banks engage various agencies like legal firm, valuation experts, field verification agencies etc to get various verification done. A legal firm does the title search of the property you would be buying and submits a report to the bank. A bank would only fund a property if you have or would be acquiring a clear marketable title to the property. A valuation firm assesses the market value of the property and submits its assessment report to the bank. Banks also engage various agencies, who would get your residence verification / office verification and if doubtful they would also get the documents a potential borrower submits; verified. A lending institution also accesses your credit bureau report (CIBIL) and has to pay all of these agencies for verification. This cost is finally levied to the customer and is charged as a processing fee.
All these charges are levied to a potential borrower as a processing fee. Some banks quote a Zero home loan processing fees, which is bank’s internal charge and charge separately for the legal and valuation fee. As a smart borrower if you do your homework well, you can save on these charges. Many banks from time to time keep coming out with the schemes with no processing fee. A careful evaluation about the processing fee and prepayment / foreclosure charges can save you a lot of money.
Login Fee: Login fee is the upfront fee, which is charged upfront irrespective of the fact whether a loan is sanctioned or not. Though this is a very small amount but is an important cost, because if the lending institution doesn’t sanction you a loan this fee is not refunded.
PROCESSING FEE FOR HOME LOAN:
Many banks offer a fixed processing fee for salaried customers and fee based on the loan amount to the self employed borrowers. Generally banks charge a fixed fee of Rs 10000/- plus service tax for any loan amount above Rs 20 lacs for salaried borrowers. To the self employed borrowers the fee is levied anywhere between .50% to 1%.
Some banks also offer zero processing fee but charge a fee in the name of administrative charges or legal charges. Many banks like HDFC Ltd, ICICI Bank, Axis Bank etc don’t charge a separate fee or administrative charges / legal fee. You should ascertain fully as to what the total cost is associated. Check out the latest offers on home loan processing fees from different lending institutions.
Processing fee on home loan processing fees balance transfer is similar to the fee charges on home loan. Sometime banks also offer a discount on home loan processing fees balance transfer.
PROCESSING FEE FOR LOAN AGAINST PROPERTY
Most Banks charge a processing fee on Loan Against property irrespective of the borrower profile. Unlike Home Loan where the banks clearly differentiate between a salaried borrower and self employed borrower, in case of LAP Loan the processing fee is almost the same. The banks charge a processing fee anywhere between .50% to 1 % depending upon the lending institution and the total borrowing. Also unlike home loan processing fees there are pre-payment charges in case of loan against property and these charges vary anywhere between 2% to 4%. Therefore in case of LAP Loan the Processing fee is not the only important factor, but the pre-payment charges also plays a significant role. Check out the LAP interest rate for the latest rates on LAP including the processing fee and the pre-payment charges.
PROCESSING FEE FOR LEASE RENTAL DISCOUNTING
The pre-payment charges / Foreclosure charges on LRD is quite similar to these charges on a LAP loan. Most of the lending institutions charge a similar rate of interest and other charges on a LRD Loan as to a LAP Loan.
{Source: http://www.fiduciamoney.com/blog/home-loan-processing-fee/}
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