Service Fee

The service fee is imposed on a loan, bank account, or other financial product to cover the costs of keeping the borrower's account active. These costs include staff salaries, software and hardware maintenance, and various loan features. The service fee is paid throughout the life of the loan and may be paid monthly or annually. The amount may be a fixed value or a percentage of the principal. Some lenders do not charge a service fee, while others charge separate service fees on additional features such as portability and redraw facility.