The Reserve Bank of India released the Fair Practices Code guidelines a few months ago, requiring all lenders to charge interest from the date of actual disbursement of funds to the customer, following an annual inspection that revealed instances of lenders engaging in unfair practices when charging interest.
Following the new regulation, interest was charged just for the length of the loan’s outstanding balance, rather than for the whole month.
Loan Rates: RBI’s new diktat lowers loan costs for you, but banks lose hundreds of crores
Here are some processing fee and part payment charges of home loan of top banks like State Bank of India (SBI), HDFC Bank, ICICI Bank, Kotak Mahindra Bank and Punjab National Bank (PNB).
(Source: Bank websites; charges as on July 10, 2024)
State Bank of India home loan processing fee
Processing fee: 0.35% of the loan amount plus applicable GST, minimum Rs.2,000/- plus applicable GST and maximum of Rs. 10,000/- plus applicable GST.
Click here to see the full list of home loan charges.
Maximum of 1% of loan amount (* Minimum PF of Rs.7500/-).
Premature payment charges
For loans sanctioned to individual borrowers with or without co-applicants, no prepayment charges shall be payable on account of part or full prepayments made through any sources* except when the loan is sanctioned for business purposes** for Adjustable Rate Loans (ARHL) and Combination Rate Home Loan (“CRHL”) during the period of applicability of the Variable Rate of interest.
For fixed, all loans sanctioned with or without co-applicants, the prepayment charge shall be levied at the rate of 2%, plus applicable taxes/statutory levies of the amounts being so prepaid on account of part or full prepayments except when part or full prepayment is being made through own sources*.
Click here to see the full list of home loan charges.
ICICI Bank home loan charges
Processing fees: 0.50% – 2.00% of the loan amount or ? 3000/- whichever is higher.
ICICI Bank prepayment charges
Part Prepayment Fees is Nil.
Prepayment charges
1. For the Facility with Fixed Interest Rate at the time of prepayment:
2% on Home loan, Home improvement loan, Land loan and Top up on home loan on amount prepaid and on all amounts tendered by the Borrower(s) towards prepayment of the Facility during the last one year from the date of final prepayment.
4% on Non-home loan (i.e. Loan Against Property, Non Residential Premises, Lease Rental Discounting, Non Home Loan Top Up, Retail Trade Finance, Overdraft) on amount prepaid and on all amounts tendered by the Borrower(s) towards Prepayment of the Facility during the last one year from the date of final prepayment.
Nil Prepayment charges on fixed rate loans if loan is booked under priority sector lending and Borrower(s) type is Small or Micro & Loan amount is less than or equal to ? 50 lacs.
2. For the Facility with Adjustable Interest Rate at the time of prepayment:
Nil prepayment charges on home loan, home improvement loan and land loan
Nil prepayment charges on top up on home loan where the Borrower(s) is individual and the end use of the loan facility is other than business purpose.
2% on top up on home loan on amount prepaid and on all amounts tendered by the Borrower(s) towards prepayment of the Facility during the last one year from the date of final prepayment where the loan is given to individual Borrower(s) for business purpose and to Non-Individual Borrower(s) for all-purpose. Nil prepayment charges will be applicable to individual Borrower(s) if loan is booked under priority sector lending and Borrower(s) type is Micro or Small Enterprise.
Nil prepayment charges on Non-home loan (Loan against property, Non Residential Premises, Lease Rental Discounting, Non Home Loan Top Up, Retail Trade Finance , Overdraft) where loan is given to Individual Borrower(s) and the end use of the Facility is other than business purpose.
4% on Non-home loan (Loan Against Property, Non Residential Premises, Lease Rental Discounting, Non Home Loan Top Up, Retail Trade Finance, Overdraft) on amount prepaid and on all amounts tendered by the Borrower(s) towards prepayment of the Facility during the last one year from the date of final prepayment where the loan is given to individual Borrower(s) for business purpose and to non-individual Borrower(s) for all purpose. Nil prepayment charges will be applicable to individual Borrower(s) if loan is booked under priority sector lending and Borrower(s) type is Micro or Small Enterprise.
Nil prepayment charges on Money Saver Account.
Click here to see the full list of home loan charges.
Kotak Mahindra Bank home loan charges
Processing fee:
Salaried: 0.5% (plus taxes and any other applicable statutory dues) of loan amount.
Click here to see the full list of home loan charges.
PNB Housing home loan charges
Processing fee: 1% of the loan applied for + GST.
Click here to see the full list of home loan charges.
PNB housing
Part or Full Prepayment of loan (on Floating Rate of Interest)
NIL – In case property is in the name of Individual ; b. In case property is name of Non-Individual entity, it will be considered as business purpose loan and a charge of 2% of Principal paid + GST will be applicable.
Part or Full Prepayment of loan (on Fixed Rate of Interest)
NIL – In case property is in the name of Individual and Payment is made from own sources ; b. In case property is in name of Individual and payment is made by/from third party, charge of 3% of principal prepaid + GST will be applicable ; c. In case property is name of Non-Individual entity, it will be considered as business purpose loan and a charge of 3% of principal prepaid + GST will be applicable.
