The Fine Print
Banks are required to disclose all charges, but many borrowers sign without fully understanding.
Key Hidden Elements
1. Floating Rate Reset Clauses β When RBI cuts rates, banks are slow to pass benefits. But when rates rise, they increase your EMI quickly.
2. Non-refundable Processing Fees β Even if your loan is rejected, processing fees (0.25-1%) are not refunded.
3. Prepayment on Fixed Rates β Fixed rate loans can charge 2-4% on prepayment. Floating rate loans have zero prepayment penalty.