provision fee
Also called: biaya provisi
An upfront bank fee on a mortgage, usually a percentage of the credit limit.
What it means
A provision fee is a charge the lender applies for approving a loan, usually calculated as a percentage of the credit limit. It is paid upfront and is not added to the loan principal. The amount differs between institutions and should be asked about from the start of the application. The provision fee is one of the costs a family must budget for before signing the agreement.
Why it matters for families
The provision fee reduces the cash that must be prepared upfront, alongside the down payment. If a family only prepares the down payment, a funding shortfall can hold up the agreement. Understanding the provision fee helps a family calculate the total cost of moving into a home, not just the property price. Overlooking this cost often throws financial plans into disarray.
Example
For example, if the credit limit is Rp400 million and the provision fee is 1 percent, the cost is about Rp4 million. This amount is paid upfront, separately from the down payment. The actual percentage should be confirmed with the lender because it can vary.
Common misunderstanding
Some people think the provision fee is already included in the installment. The correction is that the provision fee is generally paid in cash upfront at the agreement.