Loan Comparison: 3 Lenders, Low-Rate High-Fee Trap
A 3-offer comparison on a 20 lakh loan where the lowest-rate lender charges the highest processing fee, illustrating why rate alone is misleading.
Comparing 3 loan offers, Lender B (mid rate) has the lowest total cost of loan at ₹5,84,268, once interest, processing fees, and other charges are all included.
- Loan amount
- ₹20,00,000
- Rate
- 10% p.a.
- Tenure
- 60 months
- Loan amount
- ₹20,00,000
- Rate
- 10.5% p.a.
- Tenure
- 60 months
- Loan amount
- ₹20,00,000
- Rate
- 11% p.a.
- Tenure
- 60 months
Lender A (lowest rate)
Lender B (mid rate)
Lender C (highest rate)
Lender A (lowest rate)
Monthly EMI
₹42,
Total interest
₹5.5 Lakhs
₹5,49,645
Fees
₹40,
Total cost of loan
₹5.9 Lakhs
₹5,89,645
Lender B (mid rate)Recommended
Monthly EMI
₹42,
Total interest
₹5.79 Lakhs
₹5,79,268
Fees
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Total cost of loan is total interest plus processing fee plus other one-time charges, compared exactly as each offer is entered. It does not model prepayment, foreclosure charges, or floating-rate resets over the tenure.