What are the common additional charges associated with two-wheeler loans?

When you apply for a two-wheeler loan, you must consider additional fees in addition to the principal amount and interest. Typically, these are the kind of additional charges associated with two-wheeler loans:

1. Processing Fees: The lending institution charges a one-time fee to process your loan application. The cost usually ranges between 1% and 3% of the total loan amount (it might differ depending on the financial institution).
2. Documentation Charges: Lenders may charge for preparing and managing the necessary paperwork for your loan.
3. Prepayment or Foreclosure Fees: If you decide to pay off your loan early, some banks or financial institutions might charge a penalty. This compensation compensates them for the interest they lost due to the early repayment.
4. Late Payment Fees: Missing a payment deadline can result in extra charges. Staying on top of your payment schedule to avoid these additional costs is essential.
5. Insurance Fees: Often, loan providers require you to insure your two-wheeler as a security measure. The cost of this insurance can be included in your monthly loan payments.
6. GST and Other Taxes: Goods and Services Tax (GST) is applied to processing fees and other service charges.