Contractorbhai Team : What is processing fee? How much is it?
Loan Expert : Processing Fee usually ranges from 0.5% – 2%.
0.5 % is generally for secured loans, and say for loans like Home Improvement(personal loans) is 2%.
Contractorbhai Team : How do you justify the processing fee to clients?
Loan Expert : Most of the loans are doorstep now. Home owners are receiving doorstep service. So you can say its like a service cost. From this percentage a small amount goes to RBI. So for e.g. most of the banks take money form BRI, Bank gives this money to home owners as loan. Whatever loan is offered, lending fees is taken which is given to RBI.
Contractorbhai team : Does the processing fee vary say for instant loan or something?.
Loan Expert : If you receiving speed, and service like for FLEXI loan then its one time procedure and maintenance is given to RBI. Very soon you will see for FLEXI Loans – annual maintenance fees will be charged. This processing fee will be coined as annual maintenance fee. Which mean it will not be a one-time fee but annual fee.