BOI Business Loan: Bank Of India provides the business loan to the individuals, proprietors, partnership firms and limited companies to improve and expand their running business. The loan is sanctioned for the maximum tenure of 7 years and for the highest amount of ₹5 crores. To meet its financial requirements every business at some point of time has to look for external sources.
To offer new product lines and services or enter new geographical areas which include managing daily operations, purchase assets like land, machinery or even technological investments, expand business these are some of the common reasons behind seeking external funding.
Bank of India (BOI) is the largest player in the market and one of the premier public sector banks in the country which offers diverse kinds of business loans as compared to many financial institutions or banks in India. Bank of India understand that the financial requirements of an enterprise or business varies significantly depending upon its domain or functional area. Given below are some of the types of business loans that is offered by BOI.
| Loan for Self Employed | Features |
| Processing Fee | From 2% to 3% or ₹500 – 10,000 |
| Tenure | From 12 months to 48 months |
| Lowest EMI per lakh | Rs. 2,594 |
| Loan Amount | Min Rs. 5 Lakh and Max Rs. 5 Cr |
| Part Prepayment, Charges | 3% |
| Early Foreclosure, Charges | Allowed after 6 EMI’s, 3% |
- Lowest interest rates and also BOI charges interest on a daily reducing balance!
- No hidden costs or administrative charges.
- Low processing charges; only 2%-3% of loan amount
- No security require which means minimal documentation
- No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan (1% of the loan amount will be charged if you repay the loan before 6 months)
- Repayment period of up to 48 months.
Bank have a detailed criteria to determine the eligibility of a borrower for business loans. Some of the key criteria are:
| Eligibility Criteria | Description |
| Age: | 21 to 65 years |
| Minimum Turnover | Rs. 20 Lakh |
| Business Existence (in months) | 36 months |
| ITR (months) | 24 months |
| Loan Amount | Rs. 5 Lakh to Rs. 5 Cr |
| Loan Tenure | 48 months |
| Owned House or Place of Work | Not Required |
| CIBIL Score | 750 and above |
In addition to interest rates, business loan also carry some other charges which include:
- Foreclosure Charges- These charges are to be paid in case you want to repay your entire loan amount before the end of tenure period. BOI allows prepayment of loan after paying 6 EMI’s with prepayment charges – 3%
- Processing Fee- BOI asks for a processing fee of From 2% to 3% with applicable service tax
| Loan Scheme | Eligibility | Quantum | Tenure |
|---|---|---|---|
| Star Laghu Udyami Samekit Loan | Micro & Small Enterprises in rural, semi urban, urban and metro areas | Rural Areas – ₹5,00,000Semi-urban Areas – ₹10,00,000Urban Areas – ₹ 50,00,000Metro Areas – ₹1,00,00,000 | Maximum: 5 years |
| Star SME Liquid Plus | Proprietorship / Partnership firms, Limited Companies , engaged in the business for the past 3 years having audited financial statement of accountsThe unit/ borrower should have sufficient source of funds to pay the margin and initial recurring expensesThe business should be profit making for the last 2 yearsThe credit rating should meet the standardised criteria set by the bank | Minimum – ₹10,00,000Maximum – ₹5,00,00,000 | Maximum: 7 years |
| SME Auto Express | All existing SME units, as per new definition, run by Individuals, Proprietorship / Partnership firms, Limited Company, Trust, SocietyThe unit / borrower should have sufficient net worth/ source of funds to pay the margin and initial recurring expensesConduct of the existing account must have been satisfactoryThe credit rating should meet the standardised criteria set by the bank | Not specified | Maximum: 7 years |
| Star SME Term Loan | Micro & Small Enterprises in rural, semi urban, urban and metro areas | Rural Areas – ₹5,00,000Semi-urban Areas – ₹10,00,000Urban Areas – ₹ 50,00,000Metro Areas – ₹ 1,00,00,000 | Maximum: 5 years |
For Example, a person takes a loan of ₹50,00,000 from bank to enhance his business for the period of 3 years. He will repay the loan amount in 84 monthly installments along with the interest charged. The bank is offering the loan at an interest rate of 10.20% p.a. Just take a look at the calculations below to know the EMI.
Table Showing EMI, Interest Outgo, and Total Repayment Amount
| LOAN AMOUNT | INTEREST RATE | TENURE | MONTHLY INSTALMENT | TOTAL INTEREST AMOUNT | TOTAL AMOUNT |
|---|---|---|---|---|---|
| ₹ 50,00,000 | 10.20% | 1 | ₹ 4,40,045 | ₹ 2,80,536 | ₹ 52,80,536 |
| ₹ 50,00,000 | 10.20% | 2 | ₹ 2,31,186 | ₹ 5,48,475 | ₹ 55,48,475 |
| ₹ 50,00,000 | 10.20% | 3 | ₹ 1,61,806 | ₹ 8,25,010 | ₹ 58,25,010 |
EMI, Total Interest Outgo, Total Repayment (Interest + Principal)
| YEAR | PRINCIPAL | INTEREST | BALANCE AMOUNT |
|---|---|---|---|
| 1 | ₹ 15,00,533 | ₹ 4,41,136 | ₹ 34,99,466 |
| 2 | ₹ 16,60,950 | ₹ 2,80,720 | ₹ 18,38,516 |
| 3 | ₹ 18,39,879 | ₹ 1,03,154 | ₹ 0 |
- Address proof of individual: Voter’s ID Card, Aadhar card Bank statement, registry copy, rent agreement.
- Identity proof of individual: Driving License, PAN Card, Aadhaar Card, passport, Voter’s ID Card.
- Business existence proof: PAN, Goods and Services tax GST registration, copy of partnership deed, certificate of practice, registration certificate issued by RBI, SEBI, trade license.
- Copy of Income Tax PAN for 24 months
- Bank statement of last 6 months
- 1 What is the interest charged on BOI Bank business loan?
- 2 What is the minimum and maximum tenure of business loan in BOI Bank?
- 3 How much business loan amount I can borrow from BOI Bank?
- 4 Why to take business loan from BOI Bank ?
- 5 What is the processing fee charged by BOI on business loan?
- 6 Is age an eligibility factor to get loan for business from BOI ?
What is the interest charged on BOI Bank business loan?
Interest rates on Business loan in BOI are very attractive starting from 11.20% to 16.30%. Bank offer various offer for self employed professionals to get loan at very low rate of interest.
What is the minimum and maximum tenure of business loan in BOI Bank?
These loans are shorter tenure loans. You can repay your loan in a flexible period of minimum 12 months to maximum 48 months.
How much business loan amount I can borrow from BOI Bank?
BOI offers you loan if you need a minimum amount of Rs. 5 Lakh to a maximum amount of 5 Cr.
Why to take business loan from BOI Bank ?
Bank offers loan at 11.20% rate with the lowest EMI of Rs. 2,594 per lakh. If you are paying EMI more than this then you can opt for balance transfer and relocate your loan to BOI.
What is the processing fee charged by BOI on business loan?
BOI charges a processing fee of From 2% to 3% with applicable tax.
Is age an eligibility factor to get loan for business from BOI ?
Yes, age is an important eligibility factor to get loan as you should be at least 21 years old at loan approval time and 65 years old at loan maturity time.
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Categories: Loans
Source: bank.newstars.edu.vn
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