Difference Between Log-In Fees and Processing Fees in Loans
When applying for a loan, borrowers often come across two major charges: log-in fees and processing fees. While both are upfront costs, they serve different purposes. Understanding these fees is crucial to avoid unnecessary expenses and make informed borrowing decisions.
1. What is a Log-In Fee?
A log-in fee is a non-refundable charge paid at the time of loan application submission. It is collected before the lender starts processing your loan request and is used to cover the initial evaluation costs.
Purpose of Log-In Fees:
Covers preliminary verification of your creditworthiness, financial profile, and loan eligibility. Pays for initial documentation checks and legal scrutiny. Used for site visits and basic valuation in secured loans (e.g., home loans, mortgage loans, project loans). Non-refundable, even if the loan is rejected.
Typical Log-In Fee Amount:
| Loan Type | Log-In Fee Range |
|---|---|
| Home Loan | ₹5,000 – ₹10,000 |
| Loan Against Property | ₹5,000 – ₹25,000 |
| Business Loan (Secured) | ₹10,000 – ₹50,000 |
| Project Loan | ₹25,000 – ₹2,00,000 |
2. What is a Processing Fee?
A processing fee is a charge collected by the lender after the initial verification is complete. It covers the cost of detailed loan evaluation, document processing, legal checks, and administrative work.
Purpose of Processing Fees:
Covers underwriting, risk assessment, and loan sanctioning procedures. Pays for legal verification, property valuation, and final approval formalities. Usually deducted from the sanctioned loan amount. Some lenders refund it if the loan is not approved (depends on lender policy).
Typical Processing Fee Amount:
| Loan Type | Processing Fee Range |
|---|---|
| Personal Loan | 1% – 3% of loan amount |
| Home Loan | 0.25% – 1% of loan amount |
| Business Loan | 1% – 3% of loan amount |
| Project Loan | 0.5% – 2% of loan amount |
3. Key Differences Between Log-In Fees & Processing Fees
| Factor | Log-In Fee | Processing Fee |
|---|---|---|
| Purpose | Covers preliminary checks & initial verification. | Covers full loan processing & final approval. |
| When Charged? | Paid at the time of loan application submission. | Charged after the loan is sanctioned. |
| Refundable? |  No, non-refundable. |  Sometimes refundable if the loan is not approved (depends on lender). |
| Loan Types | Common in secured loans (home loan, LAP, project loans). | Applies to all types of loans (personal, business, home, car, etc.). |
| Cost Range | Fixed charge, varies by loan type. | Usually a percentage of the loan amount. |
4. Which Fee is More Important?
Log-in fees are crucial for secured loans because they cover property/legal verification. Processing fees are unavoidable for all loans, as they cover administrative and approval costs. Tip: Always check with your lender whether the processing fee will be deducted from the loan amount or needs to be paid separately.
5. How to Avoid High Log-In & Processing Fees?
Compare lenders – Some banks/NBFCs charge lower fees. Negotiate the charges – Especially for high-value loans. Check for waiver offers – Some banks waive processing fees for premium customers. Use DSA services – Direct Selling Agents may help reduce or negotiate fees.
Final Thoughts
Understanding the difference between log-in fees and processing fees helps borrowers avoid hidden costs. Always clarify the fee structure, refund policies, and applicable charges before applying for a loan.
Take the Next Step!
Looking for the right loan but unsure which one suits you best? Fair Finance offers expert consultation to guide you through your loan options and ensure you make an informed decision.
Visit our 
website: www.fairfinance.in
Email us: fairfinance.in@gmail.com
Call us: +91 9123309198
