What is the Processing Fees & Charges for Personal Loan?

In today’s time, the best way to solve the problem of cash crunch is to take  a personal loan. You can get an Instant Personal loan in no time from loan apps like Zype. 

The four important factors to consider while borrowing money are loan amount, interest rate, personal loan repayment tenure and processing fee.

In this blog, we will discuss everything you need to know about the processing fee for personal loan – its meaning, types of charges and hidden charges that you need to be careful of.

Processing Charges for Personal Loan

A processing fee is charged to cover the administrative cost incurred by the lender while processing your loan. If you want to check the processing charges for personal loans and interest rates offered to you by Zype, complete the loan application process to generate your credit line offer.

Types of Charges

Personal loan Interest Rates

Interest rate is one of the most important factors that you should consider while choosing a lender. It determines the cost of your loan. Interest rates on Zype start at 1.5% per month.

Loan Processing Fee

A processing fee is a small amount charged by loan providers to cover administrative costs. Zype charges an affordable processing fee of 2-6% of the loan amount.

Penalty Charges

This includes penal charges and late fees levied by a lender when a borrower fails to pay EMI on the due date.

Interest on Overdue EMIs

Before getting a loan, check the interest charged by the lender on overdue EMIs in case you are not able to pay on time.

Foreclosure Charges

The lender might levy a charge if you want to pay off the loan before your due date. Zype does not charge any foreclosure charges.

Also Read : Consequences of missing your EMIs

Charges to Check Before Getting a Loan

It’s a good habit to read the loan agreement to check for all the charges that could be levied on you. Before you finalise the loan, make sure to get clarity on these charges –

1. Prepayment Charges

Check how much you would be charged if you decide to make a complete or partial payment of your loan amount before the end of the loan tenure.

2. Late Payment Fees

Check the penalty amount you would need to pay if you are unable to pay your EMIs on time. 

3. Flat Rate or Reducing Rate of interest

If you’re charged a flat rate of interest, the interest is charged on the principal amount for your entire loan tenure. This means that you will pay interest on the full loan amount until your last instalment. 

Whereas in reducing rate, you only pay interest on the outstanding loan amount. Here, your interest expense reduces with each instalment. 

Also Read: Know the Maximum and Minimum Tenure for Personal Loan

Conclusion

You should always take a personal loan from a reputable lender and read the loan terms carefully before availing the loan. 

If you want to get affordable instant personal loans up to ₹5,00,000 without any hidden charges and affordable processing fees, download the Zype app. You can complete the loan application in less than 8 minutes and your credit line offer will be generated in less than 60 seconds. You can take as many loans as you want from your active credit line and pay later in convenient 3, 6, 9 and 12 EMIs.