The actual cost of a personal loan

Whenever it comes to financial emergencies, personal lending is the preferred option for many due to its flexible final use, easy application, attractive interest rates, various payment options, small documents, and quick withdrawals. Personal loans offered up to Rs. 40 lakhs can be used to deal with various situations such as medical emergencies, marriage, long-term vacation, home remodeling, etc.

What are the actual costs of a personal loan?

But have you ever wondered what the actual cost associated with a personal loan is? In addition to the number of loans and interest rates, you would have to pay each month until the end of the EMI term. Also if you do not have personal loan eligibility then the interest rates can go higher and higher.

Here are some of the cases available on personal loans:

• Interest Costs: 
  Since the loan is unsecured, the interest rate charged is slightly higher compared to a home loan or car loan. The interest rate on personal loans starts from 10.50% which can be repaid to repayable EMIs until the end of the term of office. The interest rate offered by the bank to each person depends on his or her age, credit score, employer, payment history, etc.
  
  
• Examination fees: 
  The processing fee includes the administrative costs that a bank must bear at the time of approving and processing your loan application. The processing fee is usually small and varies from 0.5% per annum to 3% per annum for the total loan. You can find out how much this loan has been deducted from or you can pay it off in advance. Also, the processing fee is not refundable to most banks, which means that lenders will not repay it even if you cancel the loan after approval.
  
  
• GST: 
  IN today’s date, the government is charging 18% of Goods and Services Tax on all the services related to the loan i.e. the preclosure of a loan or partial closure of a loan, the processing fee, cancellation charges, and duplicate issuance charges. However, it is important to note that GST does not apply to interest rates.
  
  
• EMI billing costs: 
  If you miss EMI billing, you will have to pay EMI billing costs. These costs will increase if you do not have City Union Bank personal loan eligibility.
  
  
• Prepayment/cancellation payments: 
  Banks offer the opportunity to repay your loan before the expiration date. However, most banks have a lock period that varies from six to 12 months. It means you cannot repay a personal loan before paying EMI for a certain period of time. Also, there are prepaid fees charged by lenders that vary from bank to bank.
  
  
• Loan cancellation payment: 
  If you change your mind and wish to cancel your private loan after the approval or withdrawal of the loan, the lender may request you to repay the loan cancellation. The bank may charge a flat cancellation fee and 18% GST or may charge interest on the date of payment until the date of cancellation.
  
  
• Repayment mode payment payments: 
  If you plan to change your personal loan repayment mode (say from the default debit to check or see), you will have to pay a fee. Lenders can charge elsewhere for about Rs. 500 and 18% GST every time you change the payment mode during your loan.
  
  
• Double document costs: 
  Some banks charge a fee of Rs. 50 to Rs. 500 and 18% GST re-issuing loan-related documents such as references, statements, NOCs, payments, etc. The bank may charge you a small fee to provide you with details of the outstanding loan.
  
  
• Other charges: 
  There may be other charges and may vary from lender to lender. These costs can be legal or stamp costs.
  
  

The above points will give you complete clarification of all payments and charges on personal loans and that is why it will help you to borrow the right amount and choose the right location according to your repayment ability. You can compare fees with other personal loan limits offered by various banks. This loan is best for you whenever you take this loan. You can use all the purpose.

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