When Do I Have to Pay the Processing Fee on Home Loans?

Most borrowers limit their comparison criterion when evaluating house loans from several lenders to interest rates. However, during the loan application procedure as well as the loan term, home loan borrowers must pay a variety of charges and fees. During the loan processing step, for instance, lenders impose processing costs, administrative fees, etc. On using particular services or breaking loan-related obligations, borrowers are subject to event-based fees such as conversion fees, penal rates, prepayment/foreclosure fees, etc. Understanding these fees might help borrowers better manage their home loans.

Home Loan Processing Fees

The processing fee varies from lender to lender but the home loan process remains the same. Typically, it is a percentage of the loan amount you are availing of – usually ranging from 0.25% to 7%. So, if your lender is levying a processing fee of 1% and you are availing of a Home Loan of Rs. 50 Lakh, you are liable to pay Rs. 50,000 as processing fee.

Home Loan – Home Loan EMI Calculator


To purchase a property, one obtains a home loan from any bank or non-banking financial institution (NBFI). One of the largest and most popular loans available today is the mortgage. Owning a home makes sense from both an owner’s and an investor’s perspective as long as the value of the property continues to rise.

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You take out a mortgage loan for a substantial sum over a longer term. A particular interest rate would be imposed by the bank or lending financial institution. The principal and interest portions of the monthly instalment for a house loan are fixed for the duration of the loan.

You can use a simulation called the “Home Loan EMI Calculator” to figure out how much you’ll have to pay each month towards your mortgage. Based on the amount, interest, and length of the mortgage, the home loan calculator will determine the monthly EMIs. It is made up of a box and three sliders, mostly for the loan amount, loan term, and interest rate. When you enter your information, an EMI (Equated Monthly Instalment) calculator will show you how much you must pay the bank each month to repay your house loan within the chosen period.

Tax Benefits on Home Loans

The most essential financial goal is to buy a home, which is likely everyone’s ambition. The pride and serenity that come with home ownership are immeasurable. Whether you choose to buy or build a home, you will be making a significant financial commitment. 

Many parts of the Income Tax Act of 1961 permit tax deductions for different aspects of the purchase or building of a home, especially if a home loan is accepted, in order to encourage people to pursue their ambition of owning a home. 

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Here is a quick primer on the available tax benefits if you are intending to buy a house soon.

As a borrower of a house loan, you are eligible to claim tax exemption on principal repayment under Section 80C each year, interest payments under Section 24(b) of the income tax, and an additional advantage on interest under Section 80EE if this is your first time purchasing a property.

How can I submit an online application for a home loan?

To apply for a house loan online, follow these steps:

  1. Go to the website of the bank or the lending financial institution
  2. Next select APPLY ONLINE.
  3. Enter your name and contact information.
  4. Prove your identity using an OTP, usually sent to your registered cell phone number.
  5. Choose the loan’s size and term.
  6.  Include information about your name, address, job, finances, and property.
  7. Finish your application 
  8. You will be contacted by a representative from the bank or the lending financial institution.

Also keep in mind that if you begin an online home loan application and then stop for any reason, you can always finish it by returning to the same URL later.



It is best to determine the processing fees and the hidden charges before you finalize your home loan application. Figuring out these extra charges during the process is both frustrating and puts the borrower in additional financial stress.  

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