Terms you need to rememeber
Processing Fee
A processing fee is a one-time fee charged by lenders at the time of processing the loan application. It is non-refundable even if the loan does not get sanctioned.
Penal Interest/Additional Interest
Penal interest is the rate of interest that will be charged on delayed monthly installments. The borrower will now be required to pay the delayed installment inclusive of the additional interest.
Bounce Charges
These are those charges that are levied in case of an EMI bounce. In other words, these charges are levied when you miss a loan EMI payment due to inadequate funds in your bank account.
Mandate Rejection Service Charge
Mandate rejection service charge is the charge levied on the rejection of any of the services rendered by the lender.
CCOD Annual Maintenance Charges
CCOD Annual maintenance charges are the charges levied on those who have chosen a flexible funding option such as Cash Credit or Overdraft. It is charged for the maintenance of the Overdraft
Outstation Collection Charges
If the cheque you have issued for payment has been made to a non-local branch, lenders will levy an outstation collection charge for the collection of such cheques.
Statement of Accounts
Lenders will charge a certain amount to issue your Statement of Accounts - a bank statement having a list of all transactions made from your bank account during a given period. But this amount will be charged only for a hard copy, the soft copy being free of cost.
Loan Cancellation Charges
If you wish to cancel your loan following the process of loan disbursement, the lender will charge a loan cancellation charge.
Instrument Swap Charges
If you wish to exchange or swap your loan liability or the cash flow with a different financial instrument, you can do so after paying instrument swap charges.
Duplicate Repayment Schedule
Your lender will share a repayment or amortisation schedule – a table that displays how your loan evolves over time. If for some reason, you need a duplicate of this schedule, you can apply for a new one, available in both hard and soft copies. While the soft copy is free of charge, a certain fee will be charged for the hard copy.
Duplicate NOC
If you need to apply for a duplicate No Objection Certificate due to any reason, your lender will issue a new one in your name after you pay a specific fee.
Post-Dated Cheque Charges
If you make an EMI payment using a post-dated cheque – one in which the date mentioned is subsequent to the date in which the cheque was drawn, you will be charged a fee known as post-date cheque charge
Foreclosure Charges
Foreclosure charges are levied at the time of pre-payment of a loan, whether in part or in full. No foreclosure charges are levied on loans with floating interest rates.
Foreclosure Charges for Top-Up
If you wish to pre-pay, whether in part or in full, your loan is taken as Cash Credit or Overdraft, the lending authority will levy a foreclosure charge for the same.
Foreclosure Charges on CCOD Cases
If you wish to pre-pay, whether in part or in full, the top-up loan that you had taken over and above your existing loan, the lender will levy what is known as foreclosure charges for a top-up. These charges will only be levied if the new interest rate is lower than the old one
Foreclosure Letter Charge
If you fall behind on your monthly EMI payments, the lender will issue a foreclosure notice or letter notifying you of the same. The soft copy of this letter is free of cost whereas the lender will charge a certain foreclosure letter charge for a hard copy.
What is an EMI?
Loan EMI or Equal Monthly Instalment is the amount that you need to pay every month for repaying your principal loan amount at the applicable rate of interest over the chosen loan tenure. It is the sum total of the principal loan amount and the interest amount.
The 3 Hows of deciding the right EMI
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How soon do you want to pay off the Loan?
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How much can you afford to pay in a month?
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How much of an interest rate are you comfortable with?
How much EMI do you need to pay?
Your Equated Monthly Instalment depends on the principal loan amount, the interest rate charged, and the period for which the loan is taken.
You can choose your loan EMI amount that is comfortable for you by using the Personal Loan EMI calculator.
Your EMI amount will depend upon your chosen Principal Amount, the Loan Tenure, and the Rate of Interest. Using a personal loan EMI calculator, you can choose the EMI amount you are comfortable with.
