1. Summary
  2. Types of home loan Charges

2.1 Loan processing fee

2.2 Administrative charges

2.3 Conversion fee

2.4 Late payment charges

2.5 Prepayment charges


The main purpose of housing finance is to empower you to possess your dream home. A home provides long-run security and a true estate property, appreciates usually more than the opposite manner around. a true estate is an investment that will provide you with smart returns within the coming back future. If you get a house these days, the likelihood is that among many years, the market price of your property can well increase.

At Kotak Mahindra Bank, we have a tendency to perceive the importance of your dreams which is why we try to supply economical solutions through our variety of services. we offer you home loans amid extremely customized facilities and services for seamless home-buying expertise.

Types of Home Loan Charges

Most people fulfill them would like of changing into owners by eliminating home loans. it’s the simplest thanks to affording a property collectively pays for the house in monthly installments. once you remove a loan, you have got to pay many completely different charges that exceed the particular worth of the property, and whereas most borrowers are attentive to process fees and stamp tax charges; there are many, lesser-known charges associated with home loans that do not several are attentive to. If you’re usurping a home loan, you must remember those different types of home loan charges.

Loan processing fee

This is the foremost common form of charge levied by lenders. The investor charges a fee to get your documents once you apply for the loan. this is often a non-refundable fee that is charged by the investor in the position of all the formalities associated with the loan, although the loan isn’t sanctioned. Typically, you’d be charged a processing fee of zero.50% to 1.0% of the loan quantity.

Administrative charges

A few lenders charge a separate body fee, that is additionally non-refundable. this kind of home loan charge primarily includes the price for technical and legal verification of the property and also the info provided by the recipient. each investor has its team or agency in situ to gauge the property you would like to buy and build a report on a similar, supported that the loan quantity is decided by the investor. The agency charges the investor to organize the report and also the investor passes on the charge to the house loan applier.

Conversion fee

If you would like to alter the charge per unit you’re paying once the speed of interest falls, you’ll be able to do therefore by paying a conversion fee. The conversion fee is just the number you want to pay to scale back your home loan charge per unit. The conversion fee you pay depends upon the distinction between the new and recent charge per unit and if there’s a significant distinction between the 2, you’d find yourself paying the next conversion fee. Also, this fee will affect the loan tenure therein, it’s going to be reduced. Most borrowers usually switch to a brand-new investor once the charge per unit declines therefore on avoid paying this fee; but you wish to recollect that the new investor could charge you the loan process fee since they too, got to appraise your outstanding loan quantity.

Late payment charges

This is another form of home loan charge that each lender ought to remember. As is clear from its name, this is often a charge levied by the investor on borrowers who delay the equated monthly installment or EMI payment. Borrowers got to make sure that they are doing not delay or skip paying the EMI. If you fail to repay the EMI on time, you’ll be charged a hefty penalty that might be as high as two of the owed EMI quantity.

Prepayment charges

When you remove a home loan you want to browse the document fastidiously, particularly the clause relating to payment charges. the govt. of Asian countries has abolished payment charges on home loans loving a floating charge per unit. However, just in case of fastened interest loans, the investor will still levy a payment charge. whereas it’s going to appear prudent to shut off a debt, you wish to calculate the quantity you’d be paying as a payment penalty against the general amount you’d save if you repay the loan among your chosen tenure. you must opt for this feature providing it makes money sense, otherwise, it’s higher to place your cash in another investment and see the loan to term.

These are the various styles of home loan charges that each borrower ought to remember. it’s in your best interest to achieve the maximum amount of info attainable concerning the assorted charges related to the home loan before you apply for one.