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Understanding the fees and charges on your doctor loan

Fees and charges are a part and parcel of any loan. When choosing one, they are important considerations apart from a competitive rate of interest, as they determine the total cost of your loan. Understanding these charges is crucial as it helps you gauge its affordability and plan for timely payment.

Take a look at the charges that you are likely to have to pay when you take a loan for doctors.

Processing fees

A processing fee, also known as an application fee,coversthe costs associated withprocessing your loan application. The cost of verifying documents and resources is built into this charge.Typically, this fee ranges from 1%–2%, and it is usually deducted from the approved loan amount before it is disbursed to you.

Statement charges

It is a lender’s duty to provide you with statements such the principal and interest statements, but several financial

institutions charge you a fee for providing you these details in the form of a hard copy. The fee covers charges incurred by the lender while delivering these hard copies to you. As a thumb rule, look for lenders who don’t levy this charge.

When you take a Loan for Doctors from CRR, you don’t have to pay any statement charges. You can simply log on to the secure Bajaj Experia customer portal with your username and password and access all statements and loan details online at your convenience.

EMI bounce charge

Just like a bounced cheque incurs a charge, a bounced EMI chequeattracts the same penalty. The average charge for a bounced EMI cheque is around Rs.2,500 per bounce. So, while you should pick a lender with low charges, it is more important to ensure that you have the necessary means to pay your EMIs month on month.Maintaining a dedicated account will help you do this.

Penal interest

When you default on an EMI payment or the loan itself, you have to pay a penal interest. This is over and above the interest rate of the loan, which is the cost at which you receive funds from a lender.The penal interest that you have to pay is around 2% per month.

Foreclosure charges

Foreclosing a loan involves making a single payment to repay the loan before the tenor lapses. However, this can put the lender’s interests at risk. So, most lenders levy a foreclosure charge. This is around 4%, excluding taxes, on the outstanding loan amount.

Prepayment charges

Prepayment is similar to foreclosure, as it involves making payments towards the principal to lower your balance EMIs.

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