Fees and charges on FIRSTmoney personal loans explained

When you find yourself in a financial crunch, the most convenient way to bridge the gap is getting a FIRSTmoney Smart personal loan by IDFC FIRST Bank. This loan is convenient and transparent with an attractive interest rate and a sizeable loan amount to manage all kinds of expenses. The instant and easy application allows you to get quick access to funds.

While everything progresses smoothly, understanding all the crucial terms helps you avoid unwanted surprises later. This involves looking into the personal loan fees and charges. Get a detailed insight in this blog.

Different types of personal loan charges 
 

It’s the small charges that add up to cost you when you ignore them. Knowing how they work even before you apply helps you plan your repayments smartly. IDFC FIRST Bank’s FIRSTmoney Smart personal loan narrows down the personal loan fees and charges to the bare minimum.

Here’s a comprehensive list of charges you can expect:

• Processing fees

This is a one-time payment charged to process your loan application. It typically covers verification of your eligibility, documentation, account setup, and other administrative tasks. 

The loan processing charge is charged starting at 1.5% of the total loan amount for FIRSTmoney personal loan. This is inclusive of GST. A unique proposition of FIRSTmoney personal loan is that the processing fee is charged over and above the loan amount, and not deducted from your loan amount. This way you can get the full amount disbursed to your bank account. 

However, in case you choose to withdraw the full approved loan amount, the fee will be deducted from the loan amount.

• Overdue EMIs penalty

If your EMIs aren’t paid by the due date, an overdue penalty applies. This charge is calculated as 2% of the unpaid EMI amount and continues to apply until the dues are cleared. 

Beyond the penalty, delaying EMIs negatively reflects on your credit score. Hence, it is a good practice to avoid missing payments.

• EMI bounce charges

Sometimes, EMI payments can fail without any fault of yours. Some technical issue or low bank account balance can make the EMI mandate invalid for that month. 

In such cases, you incur up to 7.5% of the EMI or outstanding balance as the EMI bounce charge. This can range between ₹400 and ₹1,000.

• Foreclosure & part-payment fees

While a foreclosure penalty is a type of personal loan charge commonly found with most lenders, IDFC FIRST Bank waives the fee. 

You can freely repay more to clear your personal loan early without worrying about the penalty. Also, part-prepayment is not allowed.

• GST & Stamp duty  

GST is applicable to the processing fee, stamp duty, and other upfront costs. The stamp duty is charged for making your personal loan agreement legal and officially valid. This fee depends on the local state laws.

Note: These charges are subject to changes based on the updated policies from time to time. 

Interest rate: A prominent part of the loan cost 
 

Most of the personal loan charges apply to specific situations. However, the interest cost is a direct and major charge on the loan. It largely influences your EMI and total repayment amount.

The interest rate on the FIRSTmoney Smart personal starts at just 9.99%. Make sure your credit score, income, and existing liabilities are in optimal condition to get the best personal loan interest rate.

Tips to reduce personal loan fees and charges 
 

The good thing about most of the charges are they are unavoidable if you handle the repayments wisely. The unavoidable ones like loan processing charges and GST, are nominal.

Here are some smart habits that can help you keep the other personal loan charges in check:

• Improve your credit profile

Your credit score has a major influence on the kind of loan offer you get. This only applies to interest rates and discounts on certain charges. 

When you have a high credit score (750+), you show lenders that you are a responsible borrower. This can help you negotiate a lower interest rate and possibly leeway with upfront costs.  

• Choose the right tenure

It’s crucial to consider a balanced approach when choosing the tenure. It’s a much more delicate decision than meets the eye. The go-to approach for many is to stretch it to make EMIs manageable. 

But when you take a closer look, the interest cost directly increases. So, you want to make it so that the interest remains affordable, while the EMIs don’t excessively strain your finances.

• Apply based on your eligibility

Borrowing as per your affordability means better management of repayments. You attract most of the personal loan charges when you fail to keep up with EMI payments. You eliminate this issue by starting right. 

Check how much loan amount you qualify for and the EMIs you can expect against it with a personal loan eligibility and EMI calculator. Such proactive planning can help you avoid most charges.

• Stay on top of your EMIs

Once you’ve chosen the EMI you’re comfortable with, plan it so you can consistently keep up until the end of the tenure. If you keep track of the EMI payment seems like a hassle, you can set up auto-debit instructions. 

Make sure to maintain a small buffer in your account as a constant to avoid EMI bounce charges.

• Use the foreclosure option when possible  

As foreclosure is allowed with IDFC FIRST Bank’s FIRSTmoney smart personal loan without any foreclosure charge, take advantage of this. 

Make a payment when you have surplus funds to close your loan early and lower the interest accumulation. This helps you save on a hefty personal loan charge.

• Track loan payments

Make it a practice to review your loan statements to spot any unexpected charges. Also, pay attention to the EMI payment alerts to check if you have missed or delayed any. 

Staying alert this way helps you spot issues quickly and promptly solve them to avoid unwanted charges.

Final words 
 

Learning about the personal loan fees and charges before you apply gives you a direction on how to handle the repayments. Now you know which action triggers which particular fee. So, you can avoid making such mistakes. You can better plan your EMIs so they’re cleared on or before the due date. 

You can pay early to lower the interest cost. You can also build your profile, as you know what influences the interest rate. All of these charges are to protect the lender’s interest, and most are reducible or avoidable with smart planning.