The first time I heard about a home loan, I thought the only thing any borrowers worried about was the interest rate. But once my lecturer discussed what are the hidden charges in home loan, I came to know there are a bunch of hidden charges. Before you apply for a home loan, no one will disclose these few hidden fees.
Administrative fees: These charges are often payable after loan sanction and cover record‑keeping, but they’re rarely highlighted upfront.
Inspection charge: There are inspection or valuation charges paid to third parties to assess the property's worth and legality. Depending on the borrower, they may cost Rs 5,000 to Rs 10,000.
Documentation charges covering loan agreements, income/interest certificates, copies, or NOCs can range from Rs 100 to Rs 500 per item.
If you alter the loan tenure later for extension or reduction, tenure change fees apply. It is a flat amount or a percentage of the outstanding principal.
Prepayment or foreclosure charges may apply if you repay early. RBI prohibits such charges on floating‑rate home loans taken by individuals for personal use, but fixed‑rate loans may incur penalties.
If you decide to switch interest rate types, e.g., move from MCLR to repo‑linked rate or change from floating to fixed, conversion fees of 0.5 to 1 % of the outstanding principal will apply.
I hope you found this information useful.
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What are the hidden charges in home loan?
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2021-10-07T17:53:45+00:00 2021-10-07T18:46:29+00:00Comment
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