If you need ₹5 lakh available for a purchase, a ₹5 lakh sanction may be insufficient when fees are deducted upfront. Ask each lender how much will actually hit your bank account and increase the sanction comparison accordingly.
Build an all-in table
Include sanctioned principal, processing fee, GST on that fee, documentation charges, insurance, net disbursal, EMI, tenure and total repayment. Add foreclosure or part-payment cost if you expect to repay early.
Do not treat insurance as automatically mandatory
Ask whether the product is required, optional or merely recommended. If financed, you may pay interest on the premium as part of the loan. Read coverage and cancellation terms.
Short tenure versus long tenure
For the same net cash requirement, a longer tenure can reduce EMI while materially increasing total interest. Compare three tenures using the same net amount received.
Example of a misleading comparison
Lender A advertises a slightly lower rate but deducts a large processing fee. Lender B charges a higher rate but almost no fee. On a two-year loan, the fee can outweigh the rate difference. On a longer loan, the rate may matter more. Only the all-in cash flow reveals the winner.
Check the KFS against the bank credit
After disbursal, confirm the amount received matches the deductions disclosed. If an unexplained fee appears, raise it immediately with the sanction/KFS attached.
Decision rule
Choose the loan that delivers the cash you actually need at the lowest total cost and with acceptable exit terms. Never compare only the sanctioned amount or headline rate.