Home Loan Processing Fees and Charges

The most important and clear fee charged on home loans is the processing fee. It is a fee you have to pay banks or NBFCs to deal with your home loan application. It is a one-time fee that is usually paid upfront – that is, you have to pay it out of your own pocket to the bank/NBFC instead of it being deducted from your loan amount. Some banks may call it administrative fee. Usually the processing fee will be charged only after your application is approved.

Most banks charge a processing fee on their home loan schemes.However, some financial institutions either do not charge any processing fee or waive it as a special offer. Some banks may have separate charges for salaried persons, self-employed professionals (SEP), and self-employed non-professionals (SENP).

Current Home Loan Processing Fees of All Banks 2022

Processing fee is generally a percentage of the loan amount. Banks might also specify a minimum and/or a maximum amount chargeable. Being a service charge, you also have to pay GST on it. The current GST on services is 18%.

People generally take a home loan for either buying a house/flat or a plot of land for construction of a house, or renovation, extension and repairs to the existing house.
The property is mortgaged to the lender as a security till the repayment of the loan. The bank or financial institution will hold the title or deed to the property till the loan has been paid back with the interest due for it.
The interest rates for home loans can be fixed or floating, or partly fixed and or partly floating, suiting the needs of the borrower.
There are also certain tax benefits available on your home loan under the Section 80EE of Income Tax Act. However, the Income tax deduction can be claimed on home loan interest by first time home buyers only.


The term property describes anything that someone – a person or a business has a legal title over. By having a legal title, the owners have some enforceable rights over it. It can be of two broad types – tangible and intangible.

  • Tangible can include automotive vehicles, industrial equipment, furniture, and real estate. Real estate is called “real property”.


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