This is to inform that by clicking on the link, you will be leaving our www.sc.com/inand entering a website operated by other parties:

Such links are only provided on our website for your convenience and Standard Chartered Bank does not control or endorse such websites, and is not responsible for their contents.

The use of such website is also subject to the terms of use and other terms and guidelines, if any, contained within each such website. In the event that any of the terms contained herein conflict with the terms of use or other terms and guidelines contained within any such website, then the terms of use and other terms and guidelines for such website shall prevail.

Thank you for visiting our www.sc.com/in


Impact of GST on Personal Loans

Impact of GST on Personal Loans

Impact of GST on Personal Loans

Impact of GST on Personal loan

If you fall short of cash for a home renovation, , wedding, vacation or some urgent financial need, a personal loan is your 3 AM friend. Personal loans are a helpful way of getting money that you want to repay later. With the government enacting Goods and Services Tax or GST, we attempt to explain the impact of GST on personal loans.

Processing fee

Loans given by lending institutions are accompanied by a processing fee. This fee is charged to a potential borrower for processing an application for a loan. Since personal loans fall in this category, borrowers are charged with a processing fee. A GST of 18% is applicable on loan processing charges Generally, a personal loan processing fee ranges from 2-3%, while Standard Chartered Bank charges up to 2.25%. You can get a loan amount up to Rs 30 lakh at attractive interest rates and get up to 50% discount on processing fees for online applications.

Prepayment charge

Another area where GST at 18% is applicable is prepayment charge for personal loans. This charge is only applicable during prepayment, ie. when you repay the entire personal loan before your tenure ends. This charge is based on a percentage of the remaining personal loan balance or a certain number of months’ worth of interest. At Standard Chartered, personal loan prepayment charge is based on the number of EMIs paid. GST is levied at the applicable rates in force on all taxable supplies  from July 1, 2017.


Even though there is a slight rise in the cost of a personal loan, the burden of the increase in cost is not that high on the borrower. Thankfully, the EMI portion has been left untouched by GST.  GST does not really have a direct impact on personal loans EMI  because the personal EMI did not attract service tax earlier, and so do not attract GST now. As a result, personal loan EMI will remain unchanged and unaffected by GST. Want to know EMI on a Rs 5 lakh personal loan? Use the personal loan EMI calculator here to know the monthly amount you need to pay

Banks like Standard Chartered can help you get quick personal loans at affordable interest rates so that your financial needs are easily met.