For a loan, how does monthly/yearly account fees work? Do they get added to the loan balance and will then affect the interest?

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    Hi new user! Were you thinking about at a bank, or? And in which country? Often they simply charge no "fees", it's just built in to the interest. Other times fees are quite high. – Fattie Nov 11 '18 at 5:37
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    What type of loan is it? Personal, auto, home loan? It depends on the Bank. They can take this as separate fees or add to the loan amount. – Dheer Nov 11 '18 at 6:07
  • @Fattie yes at a bank in Australia. But even on loans from non-banks have some sort of monthly account fees here. – Kumar Nov 12 '18 at 8:11
  • @Dheer I have seen account fees in both personal and home loan. In personal loan which is fixed, it's actually included in the monthly repayment. But in case of home loan, which is variable, it doesn't look like it gets added to the repayment. Instead its added to the loan balance. – Kumar Nov 12 '18 at 8:19
  • If it is getting added to Loan balance, you are paying interest on it. Generally there shouldn't be any fees on home loan. What country are you in? Maybe it's time to look for other institution to provide the home loan. – Dheer Nov 12 '18 at 8:24

That totally depends. I don't know about the situation in Australia, but in Germany, some loans add the fees to the balance, leaving you the option to pay it immediately or not (in the former case avoiding interest). In other cases, there is another payment added to the monthly ones for fees.

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