A Processing Fee is a one-time charge levied by banks or financial institutions for evaluating, approving, and processing a loan or financial application.
Detailed Explanation
Processing fee is a non-refundable charge collected by banks or lenders to cover administrative expenses involved in loan approval, verification, and documentation. It is usually a percentage of the loan amount or a fixed fee. Processing fees may vary depending on loan type, lender policy, and borrower profile.
Example
"If you apply for a personal loan of ₹5 lakh and the bank charges a 1% processing fee, you will have to pay ₹5,000 as a one-time processing charge."