5 Best Home Loan Providers in India That Charge Zero Processing Fees

If you are opting for a Home Loan, chances are that you already know about one of the most significant additional charges, over and above the interest, that you need to shell out while getting the loan. Yes, you guessed it right! We are speaking of the Processing Fee. 

Processing Fee

If you are new to the concept of Processing Fee, let us break it down for you. Home Loan Processing Fee is essentially a one-time fee that you ought to pay to the lender extending you the mortgage, at the time of collection of the documents. This fee is usually charged by the lender to cover for the expenses incurred with respect to the collection and verification of documents and credit appraisal. As can be easily understood, this fee is non-refundable, unless of course, it is explicitly stated by the bank, or negotiated by you.

More often than not, Home Loan processing fee may range anywhere between 0.15% and 6% of the loan amount. While the percentage might appear to be low to begin with, but, considering that a Home Loan often ranges in lakhs of rupees, the fee may prove to be quite expensive. For instance, if you are Applying for a Home Loan worth Rs. 30 Lakhs, and need to pay a processing fee of 5%, you will end up shelling out a whopping Rs. 1.5 Lakhs, which by no means is a small amount. It is for this reason that most financial advisors recommend you to look for Best Home Loan Providers in India who either has a reasonably low fee or even better, levy no charge at all.

In the wake of the recent hikes in the repo rate by the Reserve Bank of India (RBI) by up to 50 basis points (bps), most financial institutions are on the lookout for a way to encourage their customers to take loans regardless. It is in line with this objective that some lenders have forgone the processing fee on Home Loans. To help you with your search for such lenders, we have consolidated a List of Home Loan Providers in India who charge zero processing fees.

1. State Bank of India (SBI)
2. Kotak Mahindra Bank
3. IDBI Bank
4. Bank of Maharashtra

In addition to these banks, you can also relay on the following financial services companies to offer you a Home Loan without charging any additional processing fee:

1. Tata Capital
2. Reliance Home Finance Limited
3. LIC Housing Finance Limited

While these banks and lenders have been known to waive the processing fee, it is best that you inquire about the same, at the time of Applying for the Home Loan, since most lenders change their policies every three to six months.

For what it’s worth, if you are an existing customer of the bank from which you are seeking a loan, you can negotiate the terms and ask for a waiver on the processing fee.

Home Loan Other Charges

Approaching a lender who does not levy processing charges will undoubtedly prove to be in your benefit.

• Additional Info: Looking for 50 Lakh Home Loan? Check EMI & Apply
• However, you shouldn’t forget that in any case, you will have to bear some other expenses, such as the ones mentioned below:
• Legal and Technical Charges: You ought to pay these charges, at the time of submission of property documents, and are meant to cover the expenses incurred by the bank to process and verify the same. They usually range from Rs. 5,000 to Rs. 10,000.
• Memorandum of Deposit of Title Deed: Also known as MODT, this charge may range between 0.1% and 0.5% of the loan amount. The fee is levied on the submission of the documents of ownership of the property to the bank.
• Loan Conversion Charges: Albeit not levied at the time of taking the loan, you may need to pay these when you convert your credit from fixed interest type to floating interest type and vice versa. They usually come up to 2% of the outstanding loan amount at the time of conversion.
• Prepayment Charges: Just in case, you wish to make a payment towards the principal amount of the loan before the end of your tenure, either in part or full, you may be charged a prepayment penalty costing up to 2% of the outstanding loan amount. Although, this is only the case with fixed-rate loans. Floating Rate Home Loans do not attract this penalty.

We hope that in addition to knowing about Home Loan providers in India with zero processing fees, you now also have the much-needed information about the various other charges that can have a significant impact on the cost of the Home Loan. Now that you are equipped with this knowledge to make sure you get the most inexpensive Home Loan available. To this end, you can always seek the assistance of an online loan aggregator!