The latest scheme by Bank of India offers a loan for buying 2/4 wheeler automobiles. The upper ceiling of the loan amount is Rs 25 lakhs, which is purely dependent on the applicant’s income and cost of the automobile. The scheme is such that it has provision for easy repayment option with an attractive interest rate.
Purpose
- To buy a new 2/4 wheeler or a pre-owned 2/4 wheeler( with the age ceiling of the vehicle not to surpass 3 years)
- To buy a small car for personal use which do not call for heavy driving license such as Vans, Jeeps etc
- To buy a small personal vehicle, which is powered by un-conventional means of energy such as battery or electrically operated small vehicles for use in the periphery of the urban cities for transport, with the qualification that it has been duly registered with the Regional Transport Office (RTO). If not then such vehicles may be subject to financing subject to certain curtailed limits of loan and that too with a collateral security.
Eligibility
- Self-employed, professionals, salaried employees, high net worth individuals, people occupied with business/commerce/trade, senior citizens, Directors of companies, farmers, pensioners, staff members, retired employees of Bank of India (except Compulsorily retired or dismissed).
- Hindu undivided families not permitted.
- Partnership firms, companies, proprietary firms and various other kinds of corporate bodies.
- Non-residing Indians – Loans will be offered jointly with the permanent resident Indians (read close relatives), provided that the age of both the parties individually has not surpassed the ceiling of 65 years at the time of availing the finances.
Types of Loans
- Term loan/Demand loan (Demand loan is the only option for pre-owned vehicles).
Quantum of Advances
Upper ceiling for loans
- Corporate and companies
Up to Rs 100 lakhs (eligible for a fleet of vehicles for commercial use)
- Individuals (OR-ordinary resident)
Vehicles of Indian origin- up to Rs 25 lakhs
Vehicle of imported nature- up to Rs 75 lakhs
- NRIs (Non-Residing Indians)
Up to Rs 25 lakhs
- Vehicles running on non-conventional source of energy and which are not required as such to be registered with the regional transport office.
Up to Rs 4 lakhs
Agreement Charges
According to Fair code of practice.
Limits of advances
- A maximum of 24 times of the gross monthly salary, in the case of pensioners/salaried employees or a maximum of 2 times the annual gross annual average income as ascertained by the I.T returns of the past three years.
- Twice the amount of average annual cash accrued (i.e. Depreciation and Profit after tax) as per the company’s/firms audited balance sheet of the last 3 years and the P&L a/c.
- The net income in hand should be 40 percent of the total income (proposed EMI).
- With respect to farmers, the limit will depend upon his repayment capacity as is applicable in any conventional agricultural loan.
Handling/Processing Charges
- For loans up to Rs 25,000 – a one time charge of Rs 1,000
- For loans above Rs 25,000 but not exceeding Rs 25 lakhs – a one time charge of 1.10 percent of the advanced amount, subject to a maximum limit of Rs 5,000 and a Minimum of Rs 1,500.
- For loans that exceed Rs 25 lakhs – a one time charge of 0.25 percent of the total advanced amount, subject to an upper ceiling of Rs 15,000.
- In addition to service tax as and when applicable.
The said handling/processing charges have been exempted to retired employees or pensioners of the bank, staff members and senior citizens.
- For Rural Areas: Handling charges will be reduced to 50 percent that may be applicable to applicants in lieu of their loans availed by borrowers from the rural parts of the country from their respective rural branches.
- For corporate/partnership firms: The processing/handling charges would be twice those applicable to individuals.
- Additional charges in case of deviation from the standard norms: A one time charge of 25 percent of the liable processing charge, subject to a lower limit of Rs 500 and upper ceiling of Rs 3,000.
Margins
For individual including Non-Residing Indians (New Vehicle)
- Above Rs 25 lakhs – a minimum 25 percent
- Above Rs 10 lakh but less than Rs 25 lakhs – 15 percent
- Above Rs 2 lakhs but less than Rs 10 lakhs – 10 percent
- Up to Rs 2 lakhs – 5 percent
- In case of pre-owned vehicles – A minimum of 30 percent
- For firms/corporate entities – a minimum of 25 percent
Modes of Repayment
For new Vehicles
- Individuals: Vehicles of Indian origin – 72 months
Vehicles of imported nature – 84 months
- Firms/ corporate: a upper ceiling of 60 months
For Pre-Owned Vehicles
- All categories – a maximum limit of 36 months
Collateral/Security
- The hypothecation of the vehicle must be purchased out of the bank advances.
- Charges needs to be registered with the Regional Transport Office (RTO).
Under the following circumstances a third party guarantee will be required:
- For loans to any individuals for the ceiling not restricted to Rs 25 lakhs or with vehicles which are not required to be registered with the Regional Transport Office.
- Guarantee of an ordinary Resident (OR) is required to give loan to any Non-Residing Indian.
