Bank charges / Bank fees

Other bank fees include all costs related to lending, excluding interest.

When taking out a credit or loan, the borrower has to account for a number of additional costs in addition to the interest. 

Other bank fees and commissions charged in connection with loans in addition to interest can be of various types:

• credit rating fee
• handling cost
• contract fee
• commitment fee
• disbursement or drawdown commission
• contract modification fee
• prepayment fee
• guarantee fee
• other fees, commissions

Other bank charges vary significantly by bank and by type of loans. The amount of the fee varies. Sometimes the amount of the fee is fixed, but it can also be a percentage. There are also examples where the fee is charged proportionally over time, it must be paid annually, but it also happens that the bank only charges the given fee or commission once during the maturity of the loan. 

For this very reason, when taking out a loan, it is useful not only to compare interests, but also to choose based on the APR, i.e. the total loan fee index. This indicator includes not only interests, but also other bank fees and commissions. The calculation of such an indicator is required by law for financial institutions in the majority of developed countries, regulating in detail the method of calculation, as well as the information obligations regarding the APR values. 

To determine the total cost of the loan or to compare the costs of individual loans, it is therefore much more reasonable to start from the APR than to simply look at the interest rate of the loan. It is important that even the APR does not include costs that may not be incurred or cannot be calculated using a general rule. Such cost can be, for example, late interest and the notary's fee incurred when concluding the loan agreement. It is worth asking the creditor bank about these costs before accepting the offer.

Unfortunately, the APR is not available for business loans, so to estimate the total cost of the loan, it remains to thoroughly investigate and calculate all cost besides interest. This is also important because other bank fees that add up can even represent a cost of the same magnitude as the loan interest.

An important feature of the credit schemes offered with state subsidised interest rate is that, in addition to the low, often even zero percent interest, the other fees that can be charged are also extremely favorable.