123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL >> Investing---Finance >> View Article

Sme Loan Interest Rates And Service Charges You Need To Be Aware Of

By Author: Aishwarya Mahurkar
Total Articles: 291

When applying for an SME Loan there are a number of service charges which the financial institution adds to the loan application besides the SME loan interest rate. The process of obtaining a loan from financial institution takes time as there are a number of requirements that need to be made. There are four main types of SME Loans which are offered to startups namely Plant and Machinery Loan, Property Term Loan, Medical Equipment Loan and Business Loan.

When one sends in their application for an SME loan, there are a number of extra charges and fees they will be required to pay to the financial institution. Some service charges that any applicant must be aware of when applying for a loan are:

Processing fee

This fee is charged by the financial institution to subsidize the costs of the payment systems. The fee is charged when the individual decides to make a payment though debit, credit or charge cards. The fee passes on the costs on the borrower for obtaining appraisals, credit history, documentation and other required information. Usually the processing fee which is charged by a financial institution is a percentage of the loan amount being applied for.

Overdue charges on default

When an applicant applies for a loan, they are required to pay a certain amount each month as EMI. This amount will remain fixed if the individual applies for fixed interest and varies if opting for floating interest rate. If the borrower is unable to meet his monthly repayment requirements the financial institution can fine the borrower with overdue charges on defaults.

Legal and Technical fee

When an individual has submitted their application for a loan, there are a number of stages of verification which are performed. All financial institutions have their own team of legal and technical experts who verify the application along with all the documents provided. In many cases the financial institution charges a legal and technical fee from the applicant. In some financial institutions however, these charges are added along with the processing fee.

Prepayment charges

Some financial institutions have a clause which state that if any applicant prepays their loan before a certain period, they will be fined with prepayment charges. The penalty is usually decided based on the percentage of remaining loan balance or a certain number of month’s worth of interest.

Besides the SME loan interest rate, there are a number of charges one has to repay along with the loan amount. All loan applicants must be aware and pay these charges on time to ensure they face no issue during the application and repayment of the loan.

Author Bio :

The author is a seasoned writer on finance topics and she articulates aspects that are important to people availing the SME loan interest rates facility. She writes about a variety of topics covering the home loan documents, rates & business loan interest rates that help to make the best decision.

Total Views: 186Word Count: 485See All articles From Author

Investing / Finance Articles

1. Ways2capital : Commodity Market Of India
Author: Mahendra Rajput

2. Easy Ways To Minimize Trading Risk
Author: Anthony Gutridge

3. Ways2capital:- Demonetization: Stock Market Cheered!!!
Author: Mahendra Rajput

4. Check Your Car Loan Requiremets Right From The Comfort Of Your Smartphone
Author: Neha Sharma

5. Calculate Your Home Loan In Mere Seconds With The Loan App
Author: Neha Sharma

6. Looking For A Personal Loan? Download The Loan App Now
Author: Neha Sharma

7. Take A Look At How Loan Apps Work To Your Advantage!
Author: Neha Sharma

8. Calculate Your Loan Eligibility Through Your Smartphone!
Author: Neha Sharma

9. Your Smartphone Is The Key To Your Convenient Emi Repayment
Author: Neha Sharma

10. Online Loan Application: Enjoy A Stress Free Loan Application Through Your Smartphone
Author: Neha Sharma

11. Now Easily Track Your Loan Application Status Through Your Smartphone
Author: Neha Sharma

12. Did You Know That Your Smartphone Is The Best Way To Apply For A Loan?
Author: Neha Sharma

13. How Can Your Loan Application Process Be Made Easy?
Author: Neha Sharma

14. Banking Apps: Keeping Your Finances Safe
Author: Neha Sharma

15. Check Out These Features Of The Internet Banking App And How It Can Help You
Author: Neha Sharma

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: