Through their advertisements, all the banks try to show themselves to be the best option to the customers and in the market by showing off how their interest rate is lower than other banks and things like that. It is true that the rates have never been this lower in our economy and it is the best time to invest your money on a property you would like to own. With the regular EMIs, there are several other charges which the bank will charge you when you take a home loan. So, let us go through five such charges.

  1. Processing Fee

The processing fee is around 0.25 – 2.5% on the principle of the loan amount. Higher the loan amount which has been taken higher goes the processing fee. For example, if you have taken a loan of Rs. 75, 00, 000, the processing fee will be around Rs. 37,500 to Rs. 1, 87,500 but, people do not notice this fee much as this happens to be a onetime payment which is included in the EMIs you pay.

  1. Prepayment Charge

In the case of prepayment or foreclosure, the home loan has been cleared or paid off before the given tenure period. This is mostly done in the part-prepayment system where you pay an amount which is more than the amount of EMI due. Banks used to charge the customers on this but, the new mandate which has been passed by the Reserve Bank of India, banks are in no position to charge this on floating rate loan but, they certainly can when it comes to a fixed rate of home loan.

  1. Swap Charges

When you take a home loan, you have to submit either Post Dated Cheques or an ECS Mandate. If you decide to change your bank or get the specific account for your loan closed, you have to submit new Post Dated Cheques or an ECS Mandate. In such cases, the bank imposes a swap charge. This is a per-instance flat rate charge.

  1. Late Payment Charge

As the name suggests, late payment charge is the fee which the bank charges its customer when they miss to make a timely payment of their EMIs. This is charged on the amount which is overdue and is about 2-4%, although this might seem like an insignificant charge, but it has its other effects. Unable to pay your EMIs on time will affect your credit score and might make it hard for you to get a credit card in the future.

  1. Administrative Charges

This amount is charged by banks for all the legal work, valuation, keeping a track of the official documents, which are being done by it when you opt for a home loan to purchase a house or property. This is only a small amount of fee which is charged only once, depending on your loan amount.

Always keep your eyes open while taking a home loan and always be aware. For more details, visit