Banks charge processing fee in exchange for providing home loan.

In exchange for providing home loans, banks in India charge an interest. However, home loans come with a lot of associated costs aside from interest. Among these fringe charges that is part and parcel of housing finance borrowing in India, is home loan processing fee.

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What is home loan processing fee?

Home loan processing fee is the money financial institutions demand in exchange for providing the home loan service. Processing fee typically covers the time, effort and resources spend in accepting, processing and then rejecting or approving your home loan application.

Facts about home loan processing fee

All banks charge processing fee

All banks and financial institutions in India charge a processing fee to provide home loans.

Waivers part of sales pitch

As part of their marketing strategy, banks sometimes offer partial or complete waiver of processing fee.

Home loan processing fee range in India in 2023

Banks in India charge different processing fee. While some banks ask for a standard home loan processing fee, others ask for a certain percentage of the home loan as the processing fee. Most banks ask for 1-2% of the home loan amount as the processing fee.

Home loan processing fee in top banks in India in September 2023

Bank	Home loan processing fee
SBI	0.40% of the loan amount; minimum capped at Rs 10,000 and maximum at Rs 30,000
HDFC Bank	0.5% of the loan amount or Rs 3,000, whichever is higher
Axis Bank	1% of the loan amount, minimum capped at Rs 10,000
ICICI Bank	0.5% to 2% of the loan amount; minimum capped at Rs 1,500
Bank of Baroda	0.25% to 0.50% of the loan amount, capped at minimum Rs 8,5000, maximum at Rs 25,000
Canara Bank	0.50% of the loan amount, capped at minimum Rs 1,500, maximum at Rs 10,000
Punjab National Bank	0.35% of the loan amount, capped at minimum Rs 2,500, maximum at Rs 15,000
Kotak Mahindra	0.50% of the loan amount
LIC Housing Finance	0.50% of the loan amount
IndusInd Bank	1% of the loan amount or Rs 10,000, whichever is higher

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Sunita Mishra

An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.

In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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