The personal loan processing fee is a one-time fee lenders charge to cover the administrative costs of processing and disbursing the personal loan. The fee is usually deducted upfront from the loan amount or added to the loan's total cost. In India, lenders usually charge a processing fee f of up to 5% of the personal loan amount.
Personal Loan Processing Fees
Get up to ₹50 Lakhs starting at 9.99%
15.6L Reviews
Low Processing Fee
Curated offers from 30+ lenders
Personal Loans from 30+ Lenders
Money in your account instantly
Choose Best Offer Based on Eligibility
Offers ranked according to eligibility
Digital Process, Instant Disbursal
Hassle-free & paperless

What is Personal Loan Processing Fees
Why Do Banks Charge a Processing Fee?
Lenders charge a processing fee to recover costs incurred during the loan application process. These costs are associated with:
How Much is the Processing Fee for a Personal Loan?
The personal loan processing fee usually ranges between 0.5% and 5% of the loan amount. However, it may vary across lenders.
Take a look at the following table to understand how different percentages of processing fees will cost you:
| Loan Amount | 1% Fee | 2% Fee | 3% Fee |
|---|---|---|---|
| Rs. 1 Lakh Personal Loan | Rs. 1,000 | Rs. 2,000 | Rs. 3,000 |
| Rs. 3 Lakh Personal Loan | Rs. 3,000 | Rs. 6,000 | Rs. 9,000 |
| Rs. 5 Lakh Personal Loan | Rs. 5,000 | Rs. 10,000 | Rs. 15,000 |
| Rs. 10 Lakh Personal Loan | Rs. 10,000 | Rs. 20,000 | Rs. 30,000 |
How to Calculate Personal Loan Processing Fee
Let’s take an example to understand how to calculate personal loan processing fees.
Assumptions
Calculation
Step 1: Calculate Processing Fee
(2/100) × Rs. 5,00,000 = Rs. 10,000
Step 2: Calculate GST (18%)
GST = (18/100) × Rs. 10,000 = Rs. 1,800
Total Processing Fee Payable
Rs. 10,000 + Rs. 1,800 = Rs. 11,800
What You'll Receive
Lenders can either deduct the processing fee before disbursing the loan or add the fee to the total cost of your personal loan.
If the lender deducts the processing fee before disbursing the loan:
Avail Personal Loan for
All Your Needs

Personal Loan Processing Fees Charged by Top Banks
Take a look at processing fees charged by top lenders in India in 2026:
| Bank/NBFC | Processing Fees |
|---|---|
| Aditya Birla Finance | Up to 4% |
| Axis Bank | Up to 2% |
| Bank of Baroda | Up to 2% (Max. Rs. 10,000) |
| Bajaj Finance Limited | Up to 3.93% |
| Bank of India | Up to 1% (Min. Rs. 250; Max. Rs. 15,000) |
| Bank of Maharashtra | Up to 1% (Max. Rs. 10,000) |
| Canara Bank* | Up to 0.5% (Max. Rs. 5000) |
| Central Bank of India | Up to 1% |
| Cholamandalam IFC | 4% - 6% |
| Dhani Loans & Services Ltd. | 3% onwards |
| Federal Bank | Up to 3% |
| HDB Financial Services | Up to 5.90% |
| HDFC Bank | Up to Rs 6,500 |
| Hero Fincorp | 2.5% onwards |
| HSBC Bank | Up to 2% |
| ICICI Bank | Up to 2% |
| IDFC FIRST Bank | Up to 3.5% |
| IIFL Finance | Up to 5% |
| Indian Overseas Bank | Up to 0.75% |
| IndusInd Bank | Up to 3.5% |
| Kotak Mahindra Bank | Up to 5% |
| L&T Finance | Up to 4% |
| Mahindra Finance | 2% of the loan amount or Rs. 5,000, whichever is lower |
| Mannapuram Finance | 1% of loan amount |
| Moneyview | 2% onwards |
| Muthoot Finance | Varies for each application |
| Piramal Finance | Up to 5% |
| Poonawalla Fincorp | Up to 3% |
| Punjab & Sind Bank | 0.50% - 1% |
| Punjab National Bank | Up to 1% |
| Shriram Finance | Up to 5% |
| Tata Capital | Up to 3.5% |
| UCO Bank | Up to 1% (Min. Rs. 750) |
| Union Bank of India | Up to 1% (Max. Rs. 7,500) |
Note: Charges as of 1st July 2026
Zero-Processing-Fee Personal Loan
A zero-processing-fee personal loan refers to personal loan offers without any processing fees. Lenders usually carry out limited-period offers with no processing fees on personal loans. Zero processing fees can help borrowers save on the total cost of their loan. A zero processing fee is offered:
Is the Personal Loan Processing Fee Refundable?
No, the processing fee is a one-time non-refundable charge. Even if the personal loan is cancelled within the cooling-off period, the processing fee is not refunded. This is because the lender charges the processing fee to cover the cost of loan processing, including verification, risk assessments, credit score checks and more.
GST on Personal Loan Processing Fee
18% GST is charged on the processing fee of your personal loan. Most lenders deduct GST upfront from the loan principal before disbursal.
Example
Other Charges on a Personal Loan
Other than the processing fee, lenders also levy various charges on your personal loan, including:
Tips to Reduce Personal Loan Processing Fees
Processing Fee vs Interest Rate
Personal loan Interest rate and processing fee are two different charges for personal loans. For your better understanding, the difference between the two is given below in the table.
| Processing Fee | Interest Rate |
|---|---|
| One-time | Recurring |
| Paid upfront | Paid monthly |
| Administrative charge | Borrowing cost |
| Subject to GST | No GST |
How to Calculate the Actual Cost of a Personal Loan?
To accurately understand the true cost of a personal loan, it’s important to consider fees and charges, along with the personal loan interest rate. The Annual Percentage Rate (APR) gives a clearer picture of the total borrowing cost by factoring in not only interest but also additional charges such as processing fees and verification costs.
What is APR?
APR (Annual Percentage Rate) is the annualised cost of borrowing, expressed as a percentage. It includes:
Compare & Choose the Best Offer
Pre-approved Offers with Instant Disbursals
Know Your Chances of Approval
End-to-End Digital Process
Explore Our Personal Loan Lenders
Avail Personal Loan for
All Your Needs

FAQs
What is the processing fee for a personal loan?
The personal loan processing fee is a one-time charge levied by lenders to cover administrative costs.
Is GST applicable to processing fees?
Yes, GST applies to the processing fees of a personal loan.
Can a personal loan processing fee be refunded?
No, personal loan processing fees are non-refundable.
Can I get a zero-processing-fee personal loan?
Yes, lenders sometimes offer low/no processing fees on personal loans for a limited period, especially during festive seasons.
Is the processing fee deducted from the loan amount?
Yes, lenders usually deduct processing fees from the loan amount.
Can I negotiate the processing fee with the lender?
Yes, you can negotiate with the lender for a lower processing fee on your personal loan.
Does every lender charge a processing fee?
Most lenders charge a processing fee on their personal loans. However, some lenders may waive processing fees on specific personal loan schemes offered by them.
Is the processing fee included in EMI?
No, the processing fee is usually not included in your loan EMI.
Personal Loan Articles
View All ArticlesPaisabazaar is a loan aggregator and is authorized to provide services on behalf of its partners.
The APR (Annual Percentage Rate) of a personal loan is its annualised cost of borrowing, which includes the interest rate as well as the processing fees, documentation fees and other fees charged during the loan origination. The APR is expressed in the form of a percentage and thus, allows personal loan applicants to detect personal loan schemes offered at lower interest rates but with higher processing fees and/or other charges.
The APR of personal loans usually ranges between 11.29% to 35%. For example, assume that you have availed a personal loan of Rs. 5 lakhs @ 10.50% p.a. with a repayment tenure of 5 years. The processing fee charged for this loan is 1.5% of the loan amount, which amounts to Rs 7,500. Therefore, the total borrowing cost of your personal loan will be Rs 1,52,317 and its APR will be 11.16%.
Address: Paisabazaar Marketing & Consulting Pvt. Ltd. 135 P, Sector 44, Gurugram (HR) 122001
Get up to ₹50 Lakhs starting at 9.99%*
Get up to ₹50 Lakhs starting at 9.99%*







