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What are Hidden Charges? How to Avoid Them?

Mar 9, 2021 12 min read

What are Hidden Charges? How to Avoid Them?

Personal Loans and credit cards are great breathers in times of financial need. Although we are told that these facilities are free or there are no hidden charges, the consumers somehow end up paying a few hidden charges for the services. In this article, we will cover information about what are hidden charges, what are the types of hidden charges one should be aware of, and how one can avoid them easily. Read on to know all the details

What are hidden charges?

Generally, hidden charges are referred to as charges that are undisclosed to the consumer of the services by the service providers. These are unforeseen expenses that are added to the purchases.

Types of hidden charges to be aware of

There are various types of hidden charges the consumer must be aware of. Here is a list of hidden charges that usually apply to various services.

1.   Maintenance Charges

2.   Late Payment Charges

3.   GST Charges

4.   Surcharges

5.   Administrative fees

6.   Document fees

Here is what these charges mean:

Maintenance Charges

Although, we are offered free services and credit cards usually the charges are waived off for a year only. After a year annual maintenance fees kick in. so before signing up for any facility, check the documents for such charges.

Late Payment Charges

This is a big one. Whenever you are offered any services, check for the interest and late payment fee applicable, especially on loans and credit cards. So check the terms and conditions before signing for any loans and cards.

GST Charges

Did you know? Credit card transactions are subject to GST, chargeable at 18% of credit card fees. Always look out for GST Charges whenever you are paying the bills.


A few amenities such as petrol or railway tickets, when purchased with a credit card, lead to additional charges at a certain percentage of the transaction. Look for surcharges whenever you are paying for amenities as mentioned earlier.

Administrative fees

An administrative fee is charged to the consumers to cover costs associated with opening, maintaining, changing, or closing services. Whenever you are availing an instant personal loan or any other service, make sure to be aware of the administrative fee applicable beforehand.

Document Fees

Also known as service and handling charges, the service providers ask for document fees as well. While preparing documents some service providers charge fees from the consumers so be aware of that as well.

Ways to avoid hidden charges

Now that you know the types of hidden charges that are applied to your pocket for supposed free services, here is a guide on how you can simply avoid these hidden charges.

1.  Read carefully

Yes, reading through each and every clause can be tiring and tedious but hey, that is how you avoid paying unjust charges. When you avail a personal loan, the lender will give you a loan agreement with all the terms and conditions specified for you. Make sure that you take out time and carefully read the terms and conditions before signing the agreement and check how you have agreed to repay the loan. The agreement should clearly mention processing charges and servicing charges for the loan provided. It also clearly mentions the penalty charges that would be applied in case of delay or default in repayments. Although these terms are mentioned in the agreement, the consumers don’t pay heed to them and borrowers often feel that they have been tricked with some hidden charges that weren’t notified previously. So, make sure to read through the contract and make commitments accordingly.

2.  Read about the charges carefully

When you have gone through the terms and conditions of the agreement properly, understand all the charges involved in availing of the loan or service are chosen. Contact the lender to get all the information on the applicable charges and deductions that would take place during the loan tenure.

3.  Make timely payments

As mentioned earlier, there are certain hidden charges including late payment fees. Stop paying hidden late payments and avoid falling prey to such charges that you just cannot eliminate. Make timely EMI payments. This will help you to manage your debts and helps in keeping your credit score up and intact. This will definitely contribute positively and enhance the chances of future urgent personal loan approvals.

Please note, Zavron Finserv provides loans to consumers without any hidden charges easily without any hassle.

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