A home loan processing fee is a single charge levied by lenders to assess loan applications.
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Fee Range and Variation
Typically ranging from 0.25% to 1% of the loan amount, home loan processing fees may also be set at a fixed amount by some lenders, providing varying cost structures for borrowers.
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Here are factors to take into account regarding processing fees for home loans:
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Minimum and Maximum Fees
Lenders in India set both minimum and maximum limits on loan processing fees to cover essential costs and prevent excessively high charges.
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Incorporating GST Applicability
An additional 18% GST is applied to the processing fee, impacting the total expenses borrowers incur.
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Ability to Negotiate
While processing fees are typically fixed, borrowers can negotiate for reductions, especially with favourable factors like a high credit score or existing relationship with the lender.
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Potential for Fee Waivers
During festive seasons, lenders may waive or discount processing fees to attract borrowers, providing an opportunity for significant cost savings.