Are you a salaried professional? Then, you can easily get approved for a loan against salary online! But did you observe any symbols like an asterisk (*) and hashtag (#) in your loan apps? No! Then, these are some of the best ways to disguise hidden charges within your loan application, and it is very important to be aware of these hidden charges when you are trying to avail a loan against salary:
- Processing charges – This is the most common hidden charge which is available in your loan apps. This can be charged upfront or can be deducted from the disbursed loan amount. This fee is generally non-refundable and charges somewhere between 2% and 3% of the application amount.
- Prepayment penalties – Anything more than your EMI, can get you a penalty of 2-5% of your outstanding loan amount.
- Cancellation charges – This feature is available in every kind of service you opt, be it flights, train, bus bookings or even availing a loan against salary. These charges vary from institution to institution and can start anywhere from INR 1000 to around INR 3000, with an additional 18% GST charged.
- Effective interest rates – The interest rates on loans vary anywhere from 10.99% and 24% per annum to more than that. Sometimes, the upper limit can go higher in case of non-salaried individuals as well. Further, your credit score, income, financial stability and repaying capacity can help in determining the applicable interest rate.
- Late payment charges – If you default on your payments, then you will be penalized with late payment charges up to 2-3% of your EMI amount. Hence, it is advisable to repay your loan amount on time and avoid paying more interest on your late fees than your actual loan!
- Duplicate documentation charges – Additional fees will be charged for reissuing loan-related documents. These can be NOC, credit reports, etc and the charges range anywhere between INR 50 to INR 500 along with 18% GST.
- Swapping charges – If your repayment mode is suddenly swapped, for example, from paying via cheque to auto-debit, you will be charged for this swapping as well. The charges will be around INR 500 in addition to 18% GST.
- Other charges – Depending upon your lender, there are various applicable charges applied on the loan you avail. This might be based on the type of lender, your repayment behaviour, types of loan sanctioned or even from the location your loan is sanctioned. You might also be charged with stamp duties and other legal charges.
- GST (Goods & Service Tax) – Earlier, for any loan-related services, it was the service tax and VAT which were applied. But now, it is the GST which is applied for all loan-related services. This is barely ever mentioned in your loan agreement but can suddenly arise during the payment. A standard 18% is imposed on any loan processing service, which means on every INR 100, you have to pay an additional INR 18 in the form of GST.
Not all lenders impose hidden charges when you avail a loan with them. There are few lenders like Flex Salary https://www.flexsalary.com/ – a loan lending product of an NBFC (Non-Banking Financial Companies) called Vivifi India Finance Private Limited, which does not impose any hidden charges when you avail a loan.
Their main idea is to build a borrowing experience to encourage you to look at a loan as an option to rescue you from financial calamities. So, why wait? Apply for a loan against salary anywhere ranging from INR 4,000 to INR 2,00,000 with Flex Salary right away!
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