Personal Loan Processing Fees Comparison — 2026

A processing fee is a one-time charge, usually 0.5%–4% of the loan amount, that the lender deducts before the money reaches your account. GST at 18% is added on top.

On a ₹5 lakh loan, that can mean anything from ₹2,500 to nearly ₹20,000 — so the fee belongs in your comparison alongside the interest rate.

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Lowest Fee

0.5%

Union Bank & Canara Bank

Typical Fee

~2%

Most lenders

Highest Fee

Up to 6%

Some fintech loans

GST on Fee

18%

Charged on top

Processing Fee Comparison — All 20 Lenders

Sorted by lowest fee, with the approximate fee on a ₹5 lakh loan (before GST).

Processing Fee Comparison — All 20 Lenders
Lender	Processing Fee	Fee on ₹5L	Type
Union Bank of IndiaLowest Rate	0.5%	₹2,500	Bank
Canara Bank	0.5%	₹2,500	Bank
Federal Bank	0.5%–1%	₹3,750	Bank
State Bank of IndiaGovt Employee Favourite	1% + GST (min ₹1,000)	₹5,000	Bank
Poonawalla FincorpLowest NBFC Rate	0–2% (NIL for select customers)	₹5,000	NBFC
Punjab National BankLow PSU Rate	1% + GST	₹5,000	Bank
Axis Bank	1.5%–2%	₹8,750	Bank
IDFC FIRST Bank	Up to 2%	₹10,000	Bank
Yes Bank	Up to 2%	₹10,000	Bank
Bank of Baroda	2%	₹10,000	Bank
MoneyViewInstant Approval	2%	₹10,000	Fintech
ICICI BankHigh Limit	Up to 2.25% (min ₹999)	₹11,250	Bank
HDFC BankMost Popular	Up to 2.5% (min ₹999)	₹12,500	Bank
Kotak Mahindra Bank	Up to 2.5%	₹12,500	Bank
Tata Capital	Up to 2.75%	₹13,750	NBFC
Hero FinCorp	Up to 3%	₹15,000	NBFC
PrefrLow CIBIL OK	2–4%	₹15,000	Fintech
IndusInd Bank	Up to 3%	₹15,000	Bank
Bajaj FinservLongest Tenure	Up to 3.93%	₹19,650	NBFC
KreditBeeNTC Welcome	2%–6%	₹20,000	Fintech

Last reviewed August 2026. Actual terms depend on your credit profile and the lender's assessment. GST at 18% applies on fees.

Other Charges to Watch For

Prepayment / foreclosure charges

2–5% of outstanding

Applies if you close the loan early, usually after a lock-in of 6–12 EMIs.

Late payment penalty

2–3% per month

Charged on the overdue EMI. Set up auto-debit from day one.

Cheque / NACH bounce charges

₹500–₹1,500

Per bounce, plus penal interest on the missed EMI.

Loan cancellation charges

Varies

Some lenders charge a fee if you cancel after disbursal.

Duplicate statement / NOC

₹200–₹500

For physical copies; digital downloads are usually free.

Expert Tips

1Compare total cost: a slightly higher rate with zero fee can beat a lower rate with a 3% fee.
2Look out for festive-season offers, when lenders often waive processing fees.
3For loans above ₹10 lakh, ask the relationship manager to reduce or waive the fee.
4Always add 18% GST to the quoted fee to get the real figure.
5Check whether the fee is deducted from the disbursal so you know exactly what you'll receive.

Frequently Asked Questions — Personal Loan Processing Fees

What is the processing fee on a personal loan?

It is a one-time charge for evaluating and disbursing your loan, typically 0.5%–4% of the loan amount plus 18% GST. It is usually deducted from the disbursed amount.

Is the processing fee refundable if my loan is rejected?

Most lenders deduct the fee only on disbursal, so you pay nothing if you are rejected. If a lender collects it upfront, check its refund policy before paying.

Which lenders offer low or zero processing fees?

Union Bank of India and Canara Bank charge 0.5%. Poonawalla Fincorp waives the fee for select pre-approved profiles. Banks also run zero-fee campaigns during festive seasons.

Is GST included in the processing fee?

No. Quoted fees exclude GST. A 2% fee on ₹5 lakh is ₹10,000, plus ₹1,800 GST — ₹11,800 in total.

Can I negotiate the processing fee?

Often, yes — particularly for large loans or if you are an existing customer with a good repayment record.

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Figures last reviewed August 2026 and shown for information only. Interest rates, fees and eligibility are set by each lender and depend on your credit profile — confirm the final terms in the lender's Key Fact Statement before you sign. RateCut is a loan marketplace, not a lender.