Personal Loan Guide

Personal Loan Processing Fees Comparison — 2026

Transparent breakdown of processing fees across all 20 lenders. Find the cheapest option.

Lender data as of October 2026

Lowest Fee

0.5%

Union Bank & Canara Bank

Avg Processing Fee

~2%

Across all lenders

Highest Fee

3.93%

Bajaj Finserv (max)

Fee on ₹5L loan (avg)

₹10k

+ 18% GST = ₹11,800

Processing Fee Comparison — All 20 Lenders

Sorted by lowest fee · Includes estimated cost on ₹5 lakh loan

Swipe sideways to see all columns →

LenderProcessing FeeFee on ₹5L LoanTypeDetails
Union Bank of IndiaLowest Overall Rate
0.5%₹2,500BankView
0.5%₹2,500BankView
0.5%–1%₹3,750BankView
1% + GST (min ₹1,000)₹5,000BankView
Poonawalla Fincorp100% Digital Process
0–2% (NIL for select customers)₹5,000NBFCView
Punjab National BankPSU Lowest Rate
1% + GST₹5,000BankView
1.5%–2%₹8,750BankView
Up to 2%₹10,000BankView
Up to 2%₹10,000BankView
2%₹10,000BankView
MoneyViewInstant Approval
2%₹10,000FintechView
ICICI BankHigh Limit
Up to 2.25% (min ₹999)₹11,250BankView
HDFC BankMost Popular
Up to 2.5% (min ₹999)₹12,500BankView
Up to 2.5%₹12,500BankView
Up to 2.75%₹13,750NBFCView
Up to 3%₹15,000NBFCView
PrefrLow CIBIL OK
2–4%₹15,000FintechView
Up to 3%₹15,000BankView
Bajaj FinservLongest Tenure
Up to 3.93%₹19,650NBFCView
KreditBeeNTC Welcome
2%–6%₹20,000FintechView

Fee on ₹5L is calculated on the headline fee percentage. Actual fee varies. GST at 18% applicable on processing fee.

What Is Included in the Processing Fee?

  • Credit Bureau Check

    Lender pays CIBIL/Experian for pulling your credit report

  • Document Verification

    Physical or digital verification of income proof, KYC docs

  • Field Investigation

    Some lenders visit your residence/office to verify details

  • Loan Origination Cost

    Internal cost of underwriting, approving, and setting up the loan

  • Aadhaar e-KYC

    Paid to UIDAI for Aadhaar verification

  • Legal/Stamp Duty

    Separate from processing fee — charged additionally in some states — Not covered by processing fee

  • Insurance Premium

    Optional loan protection insurance — separate add-on — Not covered by processing fee

Hidden Charges to Watch Out For

Prepayment / Foreclosure Charges

2–5% of outstanding principal

Applies after lock-in period (usually 6–12 months). Some lenders like IDFC FIRST waive after 12 months.

Late Payment Penalty

2–3% per month on overdue EMI

Compounds rapidly. Set up auto-debit (ECS/NACH) from day one.

Cheque / ECS Bounce Charges

₹500–₹1,500 per bounce

Plus penal interest on the missed EMI. Maintain a sufficient balance on EMI date.

Loan Cancellation After Disbursal

₹1,000–₹5,000 flat or 1–2%

If you change your mind after money is credited. Very few lenders allow this.

Duplicate Statements / NOC

₹200–₹500 per document

Charged when you request physical copies. Free for digital/portal downloads.

NACH Mandate Setup

₹0–₹250

One-time charge for setting up auto-debit mandate. Usually waived.

Expert Tips

  • Calculate the processing fee as part of your APR comparison — a loan with 0.5% higher interest but zero processing fee may be cheaper over 24 months than one with lower rate but 3% fee.
  • Apply during festival season (Diwali, Dussehra, New Year) when banks typically run zero-processing-fee campaigns.
  • For high-value loans (₹10L+), negotiate directly with the relationship manager — they often have discretion to reduce or waive the fee.
  • Ask for a fee waiver if you are an existing customer with a clean repayment track record of 24+ months.
  • Watch out for GST — add 18% to the stated processing fee percentage to get the true cost.
  • Some lenders deduct the fee from disbursal, not collect it upfront. Verify this so you know exactly what lands in your account.

Frequently Asked Questions — Processing Fees Comparison

The processing fee is a one-time charge levied by the lender to cover the administrative cost of evaluating and disbursing your loan application. It is typically deducted from the loan amount before credit — so if you applied for ₹5 lakhs and the processing fee is 1.5% (₹7,500), you'll receive ₹4,92,500 in your account. GST at 18% is levied on top of the processing fee.

Most lenders do not charge a processing fee if your application is rejected at the credit appraisal stage. However, if the fee was collected upfront and the application is later rejected or withdrawn by you, most lenders retain the fee. Always confirm the refund policy before paying.

Poonawalla Fincorp offers NIL processing fee for pre-approved and select quality profiles. Some banks like HDFC and ICICI periodically run zero-processing-fee campaigns (usually during festival season). Union Bank and Canara Bank have very low fees at 0.5%.

Beyond processing fee, watch for: (1) Prepayment/Foreclosure charges — 2–5% of outstanding principal, (2) Late payment penalty — typically 2–3% per month on overdue amount, (3) Cheque bounce charges — ₹500–₹1,500 per bounce, (4) Loan cancellation charges — if you change your mind post-disbursement, (5) Duplicate statement or NOC charges — ₹200–₹500.

Yes, especially for larger loan amounts (₹15 lakhs+), or if you are an existing premium customer. Relationship managers at private banks have discretion to waive or reduce fees. Always ask before signing. The best time to negotiate is when the bank has already approved your application — they want the business.

No. The processing fee stated by lenders is exclusive of GST. You pay GST at 18% on the processing fee additionally. So if the processing fee is 2% on ₹5 lakhs = ₹10,000, you actually pay ₹10,000 + ₹1,800 GST = ₹11,800 total.

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