BENGALURU: All set to apply for a new home loan to buy your dream house after hours of interest rate decisions? Have you thought of comparing the miscellaneous and other lesser-known charges while comparing various home loan offers available to you? We bet not. When you take a home loan, you don't just pay the EMI on the loan, there are many charges that you have to be aware of, according to indiatimes.com.

Processing Fee:

A processing fee is one of the most obvious charges applicable for all loan borrowers. The applicable processing fee varies from one bank to another. While each bank and Non-Banking Financial Company (NBFC) is free to decide on their loan processing fee, the charges usually range between 0.25 percent and 1 percent of the loan amount. The application fee covers the preliminary expenses of a bank for conducting verification which is Rs 1,000-Rs 5,000.

Pre-Payment Charges:

Paying off the loan either entirely or in parts before the end of the loan tenure is considered as pre-payment of the loan. While there are no pre-payment charges applicable on home loans with a floating rate of interest, as per Reserve Bank of India norms, lenders do charge some penalty for home loans with fixed interest rates if the borrower wants to prepay the loan.

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