GST, or Goods and Services Tax, is an indirect tax applied on the supply of goods and services in India. The interest rate on loans will be subject to GST at a rate of 18%. Being aware of this can help you plan your finances better and avoid any surprise expenses later on. Calculating the GST amount on your loan can be a bit complicated if you are not familiar with the calculations involved. Using a GST calculator can be useful.

Secured loans like home loans, car loans, and business loans that require collateral or security will be subject to GST. Unsecured loans like personal loans and credit card loans, which do not require any collateral, are exempt from GST. GST is applicable on the processing fee charged by banks and financial institutions. Therefore, before applying for a loan, it is recommended that you do your research, compare loan offers, and calculate the total cost of the loan including the GST amount.