Bank Of Baroda Home Loans Review

Corporate Profile

Bank of Baroda is one of the most prominent banks in India, having its total assets worth Rs. 1,43,146 Crores as on 31st of March 2007. The bank was founded by Shrimant Gopalrao Gaekwad, the then Maharaja of Baroda on 20th of July, 1908 with a paid capital of Rs. 10 Lakhs. From its introduction in a small building of Baroda, the bank has come a long way to achieve its current position as one of the most important banks in India. On 19th of July 1969, Bank of Baroda was nationalized by the Government of India along with 13 other commercial banks.

The bank offers a wide array of customized and specialized services to meet the diverse needs of its customers, and these services have been categorized into Personal Banking, Business Banking, Corporate Banking, International Banking, Treasury Banking and Rural Banking services.

Analysis

Loan to Value Ratio – Bank of Baroda Home Loans can be applied for a maximum of 90% of the property value subject to credit discretion and are accompanied by a specially-designed insurance cover. Banks like GE Money, HDFC, IDBI and ING Vysya offer loans maximum up to 85% of the property value. Considering this, BoB’s offering is the most attractive LTV in the market.

Tenure – Bank of Baroda home loan are available for a maximum tenure of 25 years.

Interest Rates – Base rate (per annum) w.e.f. 1.7.2010 is 8%.

Prepayment Charges – No charges are levied if the loan is prepaid in part/full. But 0.5% of balance outstanding is charged for each year of residual period of the loan subject to maximum of 2%. This is comparable to other banks like IDBI, PNB, SBI and Bank of Maharashtra.

Incase of Home Improvement Loans, Bank of Baroda doesn’t charge a prepayment penalty for part prepayment. Whereas, if a customer opts for full prepayment, 1% is levied as prepayment penalty of amount being prepaid (including amount prepaid in last financial year).

If a customer opts for conversion from fixed to floating rate of interest, 0.5% is levied as processing charges for the residual period of loan subject to maximum 3%.

Processing Fees – Bank of Baroda charges resident Indians/NRIs/PIOs 0.35% as processing fee against loans upto Rs. 20 Lakhs; whereas for loans above Rs. 20 Lakhs, the bank charges 0.40% subject to a maximum of Rs. 15,000. The bank levies 0.35% as processing fee against home improvement loans.

This is comparable to other banks like Bank of Maharashtra which charges a processing fee in the range of Rs. 1,000 – 5,000 subject to credit discretion. This is amongst the lowest offerings in the market as against IDBI Bank’s offering of 0.5% or Rs. 11,000, whichever is lower and HDFC Bank’s offering of 0.5% or Rs. 10,000, whichever is lower. As for Bank of Baroda’s Processing fee it is lower only to Canara Bank’s offering of 0.5% or min. Rs. 500 and max. Rs.1,000.