With the implementation of GST, all services rendered by banks and financial institutions are being charged a service Tax of 18%.
If you are planning to avail a personal loan you may have wondered what the GST on personal loan is. Is there an expensive GST rate on personal loans? Has there been a significant increase?
The good news is that while there has been a slight rise in the prices associated with personal loans, it will not impact your EMIs significantly. Read on to know more.
The main question in everyone’s mind is - does the new GST rate increase the interest rate on your personal loan?
Customers should note that the GST is levied on the service rendered by the banking and the financial sector. However, interest paid on a personal loan is done at a predetermined rate for the utilization of the money borrowed and is not a service rendered by the banking and financial sector.
Therefore GST is not levied on the interest charged on personal loans. However, there are certain other components of a personal loan that are impacted by GST.
GST on personal loan is based on the following components -
As you can see, the amount is not extremely high but if you are still concerned, there are ways to cut down on the amount paid as GST on personal loan.
The GST amount paid on a personal loan is dependent on the processing and prepayment charges. Therefore, the best way to cut down on GST is to avail a loan that comes with lower processing fee or prepayment charges. Comparing various loan offerings will be beneficial.
However, at the same time, it is also good to pay attention to the interest rate charged on the loan and essentially strike a balance between all the fees and charges imposed on a personal loan.
One of the most popular personal loans in the country, Money View offers loans at affordable rates and with minimal documentation.
The interest rates and other charges on the loan are low and highly competitive and can help you save on the GST amount as given below -
Note: The regulation for GST came into being on 01 July 2017 and since then all goods and services except petroleum products, alcoholic drinks, and electricity are charged at a uniform rate all across India.</b >
Goods and Service Tax(GST) has been hailed as one of the most significant reforms on the taxation front and has simplified the existing tax structures being imposed on goods and services in the country. While most are naturally worried about the impact of this on certain services such as GST on personal loans, the amount to be paid is not extravagant.
Due to its many advantages, Money View loans are much more affordable even after factoring in GST rates. Visit the Money View website or download the loan app to apply today.