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Processing fee for car loans
Banks may provide 100% finance for the vehicle but the processing fee and other charges may be deducted from the loan amount sanctionedApnaloan.com Research Bureau
10 Aug 2007
When you apply for any kind of loan, be it a car loan or a home loan, the bank charges you some amount of money (which is some per cent of the loan amount required) as processing fee. This fee may vary from bank to bank. This amount, that needs to be paid upfront, effectively reduces the money you get.
Let us take an example. If the processing fee is say, 2 per cent and the loan amount you have applied for is Rs 2,00,000, then the processing fee works out to Rs. 2000. So, you will get Rs 1,98,000 in hand when the loan is sanctioned.
This fee is important for one to consider, since banks charge different rates. This actually can make a big difference on the real cost of the loan.