Personal Loan Charges - What are the common ones?
Benson had been lucky most of his life and his only debt had been a mortgage
and one credit card. Recently Benson wanted to purchase a boat and wanted a
simple personal loan to do it. He was concerned, however, that there would
be a lot of hidden charges and fees that would end up costing him more than his
credit card rates.
I explained to Benson that although there were charges associated with
different services provided by lenders, that it wasn't cost
prohibitive.
Common charges associated with different types of loans range from approval
fees to early repayment fees. Fees are subject to change so it is important
to get a current list of fees. Don't be afraid to compare prices,
either. For example, many lenders charge an early repayment fee on debt
consolidation loans. However, many personal loans, including student and
graduate loans do not.
Additionally, there is often a loan approval fee on new
applications. The fee for a personal loan is generally around $175 or 1% of
the loan amount if the loan is more than $17,500 up to a maximum of
$300,000. Debt consolidation loan approval fees are generally around
$200. Student and graduate loans do not usually have loan approval
fees.
There are top up fees for additional lending on existing personal loans
that can be $125 or more. Some lenders charge additional fees for revolving
lines of credit.
Generally all types of loans charge fees for failure to make
payments.
Benson bought his boat and enjoys most of his weekends at the
coast. He is pleased with the manner in which the personal loan was
executed and plans to pay it off early since there are no penalties or fees for
early repayment for personal loans.
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