Loan application rejected? Here’s Why You May Still Have To Pay Processing Fees Photo credit: BCCL
New Delhi: To avoid delinquencies, most banks and NBFCs have tightened their lending standards due to the financial downturn caused by the pandemic. Many people who have lost their jobs or suffered wage cuts have applied for loans.
When a person applies for a loan, almost all banks charge a processing fee. So if you have applied for a loan and it is not approved. In this case, you may not be able to recover your loan costs. Here’s why-
What is the loan processing fee?
These are one-off fees charged by the lender for the cost incurred by the lender for processing the loan. It typically includes document processing fees, attorney fees (if applicable), technical fees for the property appraisal carried out in the event of a mortgage or property loan, and other costs thereof. type.
Typically, banks charge lower processing fees than NBFCs.
These fees differ from bank to bank. In most cases, these are one-time, non-refundable charges. However, some lenders have a policy of cashing the check processing fee only in the event of a penalty. In many cases, lenders divide the total processing fee into two parts: a connection fee payable in advance and a balance processing fee payable at the time of sanction or disbursement.
What should customers do?
When applying for a loan, clients should discuss the processing fees upfront with the lender. Pay attention to processing fees billed under any other name.
However, there are specific guidelines that require all fees and charges to be transparent and non-discriminatory in nature. All hidden charges are prohibited.
When applying for a loan, customers should be careful if the lender is trying to sell you something like insurance, credit report, etc. as a mandatory fee to qualify for the loan. If you are not sure about these fees, you should definitely compare the rates charged by other lenders.