Bank of India Home Loan

The amount of BOI home loans sanctioned depends upon the purpose of the loan, income, repayment capacity and the area of residence of the applicant.

1. Area of Residence

• An Indian applicant residing in any city apart from major metros such as Mumbai, Kolkata, New Delhi and Chennai, can apply for a maximum Bank of India home loan amount of Rs.300 lakhs, whereas, applicants from the mentioned metros can apply for a Bank of India Home loan for a maximum amount of RS.500 lakhs.
• The minimum Bank of India home loan amount for applicant’s residing in metro and urban cities is set at Rs.1 lakh.

1. Purpose of Bank of India home loan

• For all loans availed towards extension, renovation, or repairs to the applicant’s existing house/flat a maximum loan of amount Rs.50 lakhs can be sanctioned.
• For Bank of India home loan availed towards purchase of a plot a maximum loan of Rs.300 lakhs can be sanctioned.
• For Bank of India home loan availed towards the purchase of household articles (in association with the existing home loan ) for decoration of the applicant’s home/flat , a maximum loan amount standing at the rate of 15% of the home loan can be availed. This is applicable in the case of unsecured BOI home loans.
• However, in the case of secured Bank of India home loan a maximum loan amount of Rs.5 lakhs can be sanctioned for the purpose of redecoration of the applicant’s home/flat. The interest rate on this loan will be the same as the interest on the home loan.  The BOI Home loan repayment period is set at a maximum of 10 years, including the moratorium period, if any.
• In cases of Bank of India home loan issued towards the installation of Solar PV’s at home, the maximum loan amount is issued based on the limits set by the bank. The interest rate on this loan will be the same as the interest on the Bank of India housing loan scheme.

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1. Income and repayment capacity: The amount of loan depends upon the applicant’s business profile and his income.

• A Salaried professional is eligible for a maximum loan amounting up to 72 times of his gross monthly salary or up to 6 times of his gross monthly income as pert latest IT returns.
• A non-salaried self-employed professional is eligible for a maximum loan up to 6 times of his gross monthly income as pert latest IT returns.
• In case of loans extended to HUF’S, Proprietorship firms, Partnership firms and companies, the applicants are eligible for a maximum loan amounting to 6 times of their cash accruals (depreciation amount+ profit after tax) as per latest Balance sheet and profit-loss account.

1. Net Take Home Pay: In case of Bank of India Home loan applied by individuals, the amount of loan to be sanctioned depends upon the net home take pay of the applicant. Net take home pay is the actual pay that the applicant receives after taking all the deductions into account. Deductions include the applicant’s liabilities including EMI’s of existing loans, if any, and the EMI of the proposed loan.

• For individuals earning a gross monthly income (GMI) up to Rs.1 lakhs, the minimum Net home take pay should stand at a minimum of 40% of the applicant’s GMI.
• For individuals earning a gross monthly income (GMI) lying between RS.1 lakhs to RS.5 lakhs, the minimum Net home take pay should stand at a minimum of 30% of the applicant’s GMI.
• For individuals earning a gross monthly income (GMI) above RS.5 lakhs, the minimum Net home take pay should stand at a minimum of 25% of the applicant’s GMI.
• In case of loans applied by HUF/Proprietorship firms/Partnership firms/Companies the minimum DSCR required is 1.5.

The current rate of interest charged on BOI Star Diamond Home loans is 8.50% p.a. onwards.

Key Features of Star Diamond Home Loan:

• This loan is extended to all individuals with High Net Worth, Firms and corporate with a minimum average gross income of RS.1 crore and above as per the last three years audited balance sheet and IT returns, requiring houses for the residential purpose of their directors and partners
• The minimum amount of loan to be sanctioned under this category is kept at Rs.5 crore. However, no upper limit is set.
• This Bank of India Home loan is issued depending upon the location of the property or the flat or houses to be purchased. The eligible cities are only major and metro cities such as Mumbai, New Delhi and Delhi NCR, Kolkata, Chennai, Ahmadabad, Bangalore, Hyderabad and Pune.
• The bank requires a minimum margin of 25% on the cost of construction. These costs include acquisition, renovation, extensions, and these costs exclude stamp duty, registration charges, taxes, charges extra i.e. a minimum margin of 25% on the pure value of the property is required.
• In case of loans applied by individuals, the amount of loan to be sanctioned depends upon the net home take pay of the applicant. Net take home pay is the actual pay that the applicant receives after taking all the deductions into account. Deductions include the applicant’s liabilities including EMI’s of existing loans, if any, and the EMI of the proposed loan.

1. For individuals the minimum Net home take pay should stand at a minimum of 25% of the applicant’s Gross monthly income.
2. In case of loans applied by Firm/Companies the minimum DSCR required is 1.5.

• The allotment of loan to the applicant, if the applicant is an individual is done on the basis of the minimum marks or the minimum entry level norm obtained by the applicant, as fixed by the bank.
• The allotment of loan to Firm/ Companies is done on the basis of SBS/LC/MS model.
• These loans are issued under floating rate method and the interest rate is linked to the existing base rate on a monthly basis.

The bank charges a onetime processing charge of RS.50 or the maximum of the star home loan, subject to the highest amount. Apart from this, no extra charges are levied by the bank.

• Star Smart Home loans are extended to all individuals who have an existing SB/CD account with a minimum average balance of RS.5000 over the past year, or to individuals who have recently opened a SB/CD account with the bank with a minimum opening Balance of Rs.5000.
• These loans are also extended to the bank’s salaried staff, whether current or prospective. The only term to be fulfilled in this case is that the salary of the staff member should be credited to the bank’s branch, and the repayment of the proposed loan has to be done through the same account. The applicant need not maintain a minimum balance in the account.
• This loan is also extended to self-employed professionals like doctors, engineers, lawyers, chartered accountants and business professionals with a steady source of income.
• The applicant should have the account in an operating state throughout this Bank of India loan period.
• The minimum amount of loan depends upon the business profile of the applicant. A salaried applicant can avail a minimum loan amounting to Rs.5 lakhs, whereas other applicants the minimum amount is Rs.10 lakhs when applying for BOI Housing loan scheme
• The maximum amount of loan to be sanctioned is guided by the normal home loan scheme as followed by the bank.
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• This loan is issued in the form of an overdraft facility, whereby, an applicants’ SB/CD account is directly linked to the loan account. The extra balance above the threshold limit will be automatically debited from the SB/CD account and credited in the applicant’s loan account, thus helping the applicant to pay off his loan earlier than the scheduled period. The transfer is done only in multiples of Rs.5000.
• The threshold limit is left up to the applicant’s discretion. However, the threshold limit should be over and above the minimum balance requirement of the particular account. By availing this facility, an applicant gives BOI the right to debit his account with any extra amount above the mentioned limit and credit the same to his loan account. The applicant can also use this account to deposit any surplus cash received out of benefits or any income from other legal sources.
• The bank does not allow any credit till the full amount of the sanctioned loan is disbursed or an intention of closing the account by the applicant is conveyed to the bank.
• The drawing power of the applicant is fixed in the account in correspondence with the borrower’s eligibility and the progress of work minus stipulated margin.
• The outstanding amount should not be more than the drawing power.
• Once, the EMI has begun, the EMI will be used towards payment of the loan, thereby, reducing the drawing power in the overdraft to the extent of the composition of the principal amount in the EMI paid. The interest composition of the respective EMI will be used to clear off the interest obligations as set in the loan terms & conditions.
• The repayment of the loan has to be done by ways of Equated Monthly installments payable on a regular basis by the applicant on the specified date. The number of EMI’S to be paid is decided based upon the installment scheme as applicable under normal BOI home loans scheme.
• The borrower can choose to repay the loan by ways of Post-dated Cheques, Electronic clearing Systems (ECS) or through Post-dated Cheques (PDC’S) as per extant instructions.
• Being an OD account, the payment of the EMI has to be done on a regular basis, in order to protect the account from slippage into the No- Performing Assets Category (NPA).
• The applicant can operate his account through cheque books, internet banking, mobile banking facilities etc. However, these facilities can be availed only after full disbursement and completion of moratorium period. The authorization for the same has to be received by the applicant from the respective Branch authority.
• By ways of immediate transfer of the surplus amount from his SB/CD account, the applicant can reduce the interest burden and also pay off the entire loan before the stipulated period.
• The surplus amount in the account can be used for business or personal purpose.
• This Bank of India Home loan provides an applicant with interest as well liquidity benefits.
• BOI Housing Loans are issued for a maximum period of 30 years.
• The rate of interest charged on Star Smart Home loans depends upon the amount of loan applied for, no matter what the repayment period is.

A BOI NRI Home Loan which is given to NRIs and PIOs for their housing requirements. NRIs should own a valid Indian Passport and PIOs should have availd foreign Passport with a steady source of income to apply for a BOI Home loan. Co-owners of the property would have to act as co-applicants to apply for a BOI Home Loan. If the co-applicant is an Indian resident, his income would be considered by the bank for calculating the loan repayment capacity of the borrowers. The loan is available for all housing related needs of the NRI and PIO individuals which also include taking over of home loans from other banks and financial institutions. The amount of loan granted to NRIs would be:

For construction/purchase of a house – Rs.300 lakhs or Rs.500 lakhs for house in metro cities

For repairs or renovations – Rs.50 lakhs

For purchasing a plot of land – Rs.100 lakhs

A margin requirement is also sought by the bank for its NRI home loans which ranges from 15% to 25% of the loan amount sanctioned depending upon the quantum of loan and whether the loan is a first loan or a second loan. An equitable mortgage or mortgage of the property to be bought using the loan amount is also required under this loan scheme. A free Personal Accident Insurance cover is available with the home loan available at Bank of India for loan amounts up to Rs.500 lakhs. A life insurance cover, however, would have to be paid for by the loan applicant where the premium rates would be made affordable. Other attractive features of the loan include interest charged on a daily reducing balance method, facility of prepayment of the loan without paying any additional charges if the loans offered by Bank of India are under a floating rate of interest basis and the facility of stepping up or stepping down the payable EMIs.

Rate of Interest of Bank of India Star Home loans:

The Bank of India Home loan is issued under floating rate method and the interest rate is linked to the existing base rate on a monthly basis. Base rate is the lowest interest rate at which the bank can issue loans. The bank cannot offer any Bank of India Home loan at an interest rate lower than the existing base rate. The base rate of the bank is affected by the changing trends in the market rate. In case of a sudden increase in the market rate, the base rate goes up, thereby, increasing the existing BOI Home loans interest rate on all the loans issued by the bank. However, in case of a sudden fall in the market rate, even though the base rate goes down, the bank cannot decrease its interest rates on all the loans issued beneath the permissible base rate.

• The Rate of interest charged on loans up to Rs. 30 lakhs is set at the MCLR rate 8.55% p.a.
• The Rate of interest charged on loans amounting to more than Rs. 30 lakhs (CIBIL Score 760 and above) is set at the MCLR rate 8.55%
• The Rate of interest charged on loans amounting to more than Rs. 30 lakhs (CIBIL Score below 760) is set at MCLR rate + 0.10% p.a. = 8.65%

Loan Processing charges on home loan application:

• In case of individuals, the bank charges a onetime processing fee standing at the rate of 0.25% on the sanctioned loan amount, subject to a minimum of Rs.1000 and a maximum of Rs.20000.
• In case of Bank of India Home loan extended to partnership firms and corporate borrowers, the processing charge is double the charges levied for individuals.
• In case of loans availed by rural applicants, the loan processing charge is kept @ 75% of the charges levied for individuals. (plus S.T)
• All other charges and fees levied are guided by the bank’s normal Bank of India Home home loan scheme.