Loans & credit
Processing fee
A one-time charge a lender adds for setting up your loan, usually a small percentage of it.
A processing fee is what the lender charges upfront to handle your loan application and paperwork.
It is often 0.5% to 2% of the loan amount, plus GST, and may be deducted from the disbursed amount.
It is negotiable, especially if you have a strong credit score, so always ask for a waiver or discount.
For example
On a ₹10L personal loan, a 2% processing fee is ₹20,000 plus GST, taken before the money even hits your account.