What are the interest rates and fees associated with the loan?

The interest rates and fees for a loan depend on several factors like the loan amount, tenure, type of loan, lender policies, applicant's creditworthiness, purpose of the loan, etc. Typically, here are the fees associated with a loan:

• Interest Rates: This is expressed as a percentage of the loan amount sanctioned. Financial institutions charge interest for providing the loan. Secured loans like home loans and car loans have lower interest rates than unsecured loans like personal loans or credit cards.
• Processing Fee: This is a one-time fee that typically ranges from 0.5% to 2% of the loan amount. Loan providers charge this fee to process the loan application, perform credit checks, evaluate eligibility, and charge documentation, among other things.
• Prepayment Charges: Borrowers have to pay penalties if they foreclose the loan before the tenure. This is usually a specific percentage of the outstanding loan amount and is charged to compensate the lender's loss of interest income.
• Late Payment Fees: Financial institutions may charge late payment fees if the EMI payment is not made by the due date.
• Other Charges: Administrative fees, statement charges, cheque bounce charges, etc, may also be applicable. Taxes like Goods & Service Tax (GST) will be added to the interest and fees.

Before taking a loan, carefully review all applicable interest rates and charges. Compare rates across banks and Non-banking Financial Companies (NBFCs) before deciding. Opting for longer tenures can reduce the EMI burden despite higher interest outgo. Most importantly, read the fine print and fee structure thoroughly.