Bank of India Home Loan
Bank of India (BOI) offers one of the best home loans at affordable attractive interest rates starting at just 6.85%. The maximum loan amount that can one can avail of is Rs.5 crores.
BOI housing schemes can be used for a variety of purposes such as: purchasing a Plot; purchasing/construction of a house/flat; renovating/ repair/alteration/addition to a house/flat.
Home Loan
A home loan is often a very large amount that you borrow from the bank, for the purpose of buying a home. The EMI also tends to be high and therefore you need to decide beforehand how much an amount of loan you would want, what interest rate you are comfortable paying, and also the tenure of the loan.
BANK OF INDIA HOME LOAN DETAILS
| Interest Rate | Starting at 6.85% onwards |
| Loan Tenure | From 0 to 30 years |
| Loan-to-Value Ratio | Up to 85% of the value of the property |
| Processing Charges | Up to 0.25% of the loan amount. |
If you plan to apply for a loan to buy property/plot or construct your own house, then check out Fincity, where you will get a variety of options to choose from!
But also make sure you’re aware of all your responsibilities b5efore you take a loan.
Bank of India Home Loan Interest Rates
The interest rates for a Home Loan through Bank of India depends on mainly the repo rate fixed by RBI. But it also depends on the Credit Score of the applicant.
Below is a table consisting of the varied interest rate for different Credit Scores
| Credit Score | Salaried | Self-Employed |
|---|---|---|
| Above 759 | 6.89% | 6.89% |
| CIBIL score between 725 to 759 | 7.00% (for women beneficiary) | 7.10% (for others) |
| 7.05% (for others) | 7.15% (for others) | |
| CIBIL score between 675 to 724 | 7.10% (for women beneficiary) | 7.70% (for others) |
| 7.15% (for others) | 7.75% (for others) | |
| CIBIL score between -1 and 0 | 7.00% (for women beneficiary) | 7.10% (for others) Note: Sanctioning in this bracket will be in the hands of the next higher authority i.e. one level above the usual sanctioning authority. |
| 7.05% (for others) | 7.15% (for others) Note: Sanctioning in this bracket will be in the hands of the next higher authority i.e. one level above the usual sanctioning authority. |
Factors Affecting EMI of Home Loan
Home Loan EMI can be calculated using an online Housing Loan Calculator which takes into account many factors like loan amount, interest rate and the tenure or duration for which you are planning to avail the loan.
- Loan amount – This is the amount you want to borrow to fulfil your home needs. Home loan amount mainly depends on value of the property for which the loan is availed.
Fincity offers Home Loan for amounts as low as Rs. 30 lakhs to as high as Rs. 5 Crores.
- Loan Tenure – Loan tenure is the duration over which a Home Loan is repaid. In practice, a shorter tenure results in higher EMIs but helps you save on the total interest payout of the loan. The longest loan tenure available across banks and NBFC’s in India for buying a home on a loan is around 30 years, subject to the borrower’s current age and retirement age.
- Interest Rate – The Rate of Interest is the interest charged on the borrowed loan amount and is one of the components of monthly EMI along with principal repayment.
Home Loan Amortization Calculation
An amortization schedule is a table of periodic loan payments that shows the amount of principal and the amount of interest that make up each monthly payment until the loan is paid off at the end of its tenure.
The Home Loan monthly EMI will be equal, in a schedule of amortization, but the component of the EMI, which consists of principal payment and also the interest payment, will not remain the same every month, meaning it keeps on changing.
The EMI schedule of loan for an amount if Rs.20 lakhs and for a tenure of 30 years is explained below in the table.
| Year | Interest Paid During each Year | Principal Repaid During Each Year | Total Amount Paid During Each Year (Interest + Principal) | Principal Outstanding |
|---|---|---|---|---|
| 2021 | Rs.1,34,349 | Rs.21,315 | Rs.1,55,664 | Rs.19,78,685 |
| 2022 | Rs.1,32,864 | Rs.22,799 | Rs.1,55,664 | Rs.19,55,886 |
| 2023 | Rs.1,31,277 | Rs.24,387 | Rs.1,55,664 | Rs.19,31,499 |
| 2024 | Rs.1,29,579 | Rs.26,085 | Rs.1,55,664 | Rs.19,05,415 |
| 2025 | Rs.1,27,763 | Rs.27,901 | Rs.1,55,664 | Rs.18,77,514 |
| 2026 | Rs.1,25,820 | Rs.29,843 | Rs.1,55,664 | Rs.18,47,671 |
| 2027 | Rs.1,23,742 | Rs.31,921 | Rs.1,55,664 | Rs.18,15,749 |
| 2028 | Rs.1,21,520 | Rs.34,144 | Rs.1,55,664 | Rs.17,81,606 |
| 2029 | Rs.1,19,142 | Rs.36,521 | Rs.1,55,664 | Rs.17,45,084 |
| 2030 | Rs.1,16,599 | Rs.39,064 | Rs.1,55,664 | Rs.17,06,020 |
| 2031 | Rs.1,13,879 | Rs.41,784 | Rs.1,55,664 | Rs.16,64,236 |
| 2032 | Rs.1,10,970 | Rs.44,694 | Rs.1,55,664 | Rs.16,19,542 |
| 2033 | Rs.1,07,858 | Rs.47,805 | Rs.1,55,664 | Rs.15,71,737 |
| 2034 | Rs.1,04,530 | Rs.51,134 | Rs.1,55,664 | Rs.15,20,603 |
| 2035 | Rs.1,00,969 | Rs.54,694 | Rs.1,55,664 | Rs.14,65,908 |
| 2036 | Rs.97,161 | Rs.58,503 | Rs.1,55,664 | Rs.14,07,406 |
| 2037 | Rs.93,087 | Rs.62,576 | Rs.1,55,664 | Rs.13,44,830 |
| 2038 | Rs.88,730 | Rs.66,933 | Rs.1,55,664 | Rs.12,77,897 |
| 2039 | Rs.84,070 | Rs.71,594 | Rs.1,55,664 | Rs.12,06,303 |
| 2040 | Rs.79,085 | Rs.76,578 | Rs.1,55,664 | Rs.11,29,725 |
| 2041 | Rs.73,753 | Rs.81,910 | Rs.1,55,664 | Rs.10,47,814 |
| 2042 | Rs.68,050 | Rs.87,614 | Rs.1,55,664 | Rs.9,60,200 |
| 2043 | Rs.61,949 | Rs.93,714 | Rs.1,55,664 | Rs.8,66,486 |
| 2044 | Rs.55,424 | Rs.1,00,239 | Rs.1,55,664 | Rs.7,66,247 |
| 2045 | Rs.48,445 | Rs.1,07,219 | Rs.1,55,664 | Rs.6,59,029 |
| 2046 | Rs.40,980 | Rs.1,14,684 | Rs.1,55,664 | Rs.5,44,344 |
| 2047 | Rs.32,994 | Rs.1,22,669 | Rs.1,55,664 | Rs.4,21,675 |
| 2048 | Rs.24,453 | Rs.1,31,210 | Rs.1,55,664 | Rs.2,90,465 |
| 2049 | Rs.15,317 | Rs.1,40,346 | Rs.1,55,664 | Rs.1,50,118 |
| 2050 | Rs.5,545 | Rs.1,50,118 | Rs.1,55,664 | Rs.0 |
Formula for EMI Calculation
Generally, the EMI for a Home Loan is calculated using the given formula:
E = P * r * (1+r) ^ n / ([(1 + r) ^ n] – 1)
In the formula mentioned above,
E = Equated Installment
This is the total obligations required to pay per month
P = Amount of Loan
This can be anywhere between Rs.15,00,000 to Rs.5,00,00,000
r = Rate of Interest
This means the interest rate per month. For Punjab National Bank, this ranges from 6.9% to 8.30%
n = tenure in months
Usually, the tenure for a home loan ranges from 15 years to 30 years.
For PNB Home Loans, the tenure ranges from 60 months all the way up to 360 months or 30 years.
Home Loan Fees and Additional Charges
Depending on the loan type you are applying for, a few charges may be levied. They are mentioned below:
- Processing fees: This is a one-time fee that is to be paid to the home loan provider after the loan application has been approved. The processing charge is dependent on the bank and the loan scheme you are applying for, the processing charge thus is a variable metric. This fee is non-refundable.
- Prepayment charges: This is the fee or the penalty you will have to pay the lender, should you plan to repay your home loan before the completion of the tenure of the loan.
- Conversion fees: Some banks might also charge a small conversion fee if and when you decide to switch to a different loan scheme or even a different loan provider in order to decrease the interest rate associated with your current scheme.
- Cheque dishonor charges: This type of fee is levied when the loan provider, like the Bank or NBFC, is provided that a cheque issued by the borrower is found to be dishonored due to reasons such as insufficient funds in the borrower’s account.
- Home insurance: One of the best ways to protect the home is to insure it. The premium of this insurance should be paid directly to the concerned company during the insurance term to make sure that the insurance policy is running during the home loan tenure.
- Default charges: Loan providers also charge a penalty on delayed or missed repayments i.e., if you do not make your Equated Monthly Instalments (EMIs) or Pre-EMIs on time. But these types of defaulting charges vary from one bank to another.
- Incidental charges: These charges cover the expenses and costs incurred by the bank to recover dues from a borrower who has failed to make his monthly installments on time.
- Statutory/regulatory charges: The fee might include all the expenses associated with the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI), Memorandum of Entry and Deposit, and also stamp duty. You can visit the CERSAI’s official website to know more about these charges.
- Photocopy of documents: The fee is paid to the bank if you need a photocopy of your home loan documents for any personal needs.
- Change in loan term: Some banks also charge a nominal fee if you think of changing the tenure of your loan.