Know the Types of Housing Loan Charges

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3 Min 22 Jan 2024

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Home Loan Charges
Types of Home Loan Charges

Home Loan Charges

Availing of a Home Loan can have several benefits such as tax exemptions. However, there are certain charges associated with a Home Loan that you should get acquainted with to avoid any surprises. You should proceed with your chosen Home Loan lender keeping in mind the additional charges and your requirements.

Below is a compilation of the different types of Home Loan charges you may have to pay during and after availing of a Home Loan.

Different Types of Home Loan Charges

If you are planning to avail of a Housing Loan, the following are the associated charges for a Home Loan you may be required to pay.

Loan Processing Fee

The Home Loan process fee is an important and one-time charge levied by your lender at the time of approving your Home Loan. It is a percentage of your loan amount, which varies from lender to lender. Bajaj Housing Finance charges a processing fee of up to 4% + GST as applicable.

Conversion Fee

Borrowers may have to pay conversion fees when they transfer their existing Home Loan to another interest rate with the same lender. This typically occurs when existing borrowers want to move to a lower interest rate on their Home Loans.

Late Payment Charges

If there is a delay in your EMI payment, your lender may charge you a late payment fee. You can choose to use our Home Loan EMI Calculator to plan your finances in advance to avoid any late payment fees.

What is the Difference between Fixed Rate and Floating Interest Rate?

An interest rate is a charge levied by the lender on the Home Loan principal amount, as a cost of borrowing. Traditionally, two types of interest rates are offered on Home Loans, namely, fixed rate and floating rate. To learn more about these two interest rates, read on.

Fixed Interest Rate

As the name suggests, this type of Home Loan interest rate does not change through the repayment tenor. A fixed interest rate is agreed upon between the lender and the borrower before the loan sanctioning.

Floating Interest Rate

Floating interest rate Home Loans offer more fluidity in terms of the interest component. The interest rate is pegged on several factors, including either an internal or an external benchmark, which allows it to move higher or lower, depending on market factors.

Apart from this, there is also a hybrid rate in which the interest rate changes from fixed to floating interest rate after a certain period during your repayment journey.

Read Also: Different Types of Home Loans

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