Processing fee (प्रोसेसिंग शुल्क)
A processing fee is a one-time charge the lender deducts for evaluating and setting up your loan, usually a percentage of the sanctioned amount. Under RBI rules every such fee must appear in the Key Fact Statement, and nothing outside the KFS can be charged.
Worked example
₹25,000 loan with a 2% processing fee: fee = ₹500 + 18% GST (₹90) = ₹590. You receive ₹24,410 in your account but pay interest on the full ₹25,000 — one reason the APR exceeds the headline rate.