ICICI Bank Home Loan Review
Dreams inspire the people from within. Enamored by the dreams, people go all out to achieve them in real life. Similarly, ‘dream home’ is what everyone dreams to realize within their lifetime. There is nothing wrong in the dream but the steps to be taken to realize the dream are not free from the pitfalls. One should be careful in choosing the right type of home loans and avoid the discomforts in future.
Home Loans types & the Need to Know Them
Mr. Kumar wanted to have a home for him and family. He had a modest budget and never wanted to go beyond it. But everything got changed when he visited an apartment that was built in a sprawling locality surrounded with natural greenery, small hill range and a beautiful lake. He could not resist the temptation of going for it though it has doubled his budget.
He had a confidence that the chosen home loan type can save him from any known disasters. Kumar has selected the flexible EMI option which allows him to accelerate or slowdown the loan repayment. But things did not go as he perceived due to the recession and the bad hit taken by his company. Luck did not favor him even after he changed couple of jobs with marginally increased income. Finally Kumar ended up with no savings but with the mounting EMI payments. His earning and savings were slowly eaten away by the wrong plan chosen by him.
In the exuberance of realizing the dream without assessment of pros and cons can always push you into a troubled future. The new home can become a new burden, an enormous burden, to carry for long time. A home loan with bad credit rating can ruin the plans if it is not identified before applying for it.
The trust levels of the HFC (Home loan Financing Companies) help the customers to gain confidence on the transparency of terms and conditions of the product.
ICICI Bank Ltd is the fourth largest private sector bank in India and with close to $99 billion worth of assets, ICICI Bank Ltd is the second largest bank by assets and with over $13 billion revenue it is the third largest bank in the country in market capitalization. Since its inception in 1998 as a subsidiary of Industrial Credit & Investment Corporation of India, it has built up the reputation of being most trusted bank. Over the period, ICICI has garnered decent customer base as one of the leading home loan banks in India.
ICICI Bank Home Loans
Home loans from ICICI are available under different categories like:
- Home Loans
ICICI Bank offers wide range of home loans products with easy and flexible repayment options. The bank assures of easy documentation and processing of the loan applications. It offers free personal accident insurance with every approved home loan.
- Land Loan
Customers can buy a plot for self construction by availing this lone. Construction of house can be undertaken by the customer on later date too. This loan is available for the lands within the municipality limits only.
- Home Improvement Loan
This loan helps the customers (existing & new) to add or modify their dwelling units.
- EMI Under Construction
This product is different from the regular home loan as the EMI of home loan would be structured in such way that the repayment would be partly adjusted towards the principal amount right from the construction stage itself. By this, customers can have the relief of paying huge EMI on a later date.
- Home Plus
This is an exclusive loan plan from ICICI and is like an add-on loan which can be availed against the constructed home. With Home Plus loan, customers can get a top-up to purchase car, durables or can meet up with medical or marriage expenses. ICICI can extend a Home Plus loan amount equal to the original home loan amount and offers this loan in line with the tenure of the home loan i.e. up to 20 years.
ICICI Bank’s Home Loan Features
ICICI says that the home loan plans are designed by keeping the individual requirements in view. It says that their plans are not just meant to finance the purchase of plot or construction of home but goes beyond these needs and are capable of offering cushion to the customers to withstand the sudden impacts of changed scenarios in future.
Home Loan Amount
The sanction of home loan is subject to the ability of the applicant in satisfying the critical parameter i.e. the capacity of repayment. If this condition is fully satisfied then the applicant would be eligible to get home loan up to 80% of the property’s value selected by him/her.
Home Loan Repayment Tenure
ICICI Bank offers maximum repayment tenure of 20 years and for the salaried employees, the tenure could be fixed up to their retirement age.
Eligibility for Home Loan
Though the need for home loan is the common aspect with all the customers, the sanction of the loan is subject to the scrutiny of several important and mandatory parameters.
Every bank follows the eligibility evaluation before approving any loan. On the same lines, ICICI Bank also does the verification of the value of the property identified by the customer, whether he/she wants to buy it by partnering with friend or family member, gross monthly income of the borrower and in case of partnering the gross monthly income of the co-borrower and tenure of repayment etc.
By assimilating the above data, the bank does the credit appraisal of the applicant and once all the conditions are satisfied, the loan would be sanctioned to the customer.
Interest Rates on ICICI Home Loans
ICICI offers two types of interest rates i.e. (1) Renewable fixed rate and (2) Fixed rate.
The Fixed Rate interest enables the customers to maintain a standard interest rate during the initial periods of payments i.e. either for first 12 months or 24 months and thereafter the loan amount moves to the floating interest rate.
The rates of interest would be charged differently for different loan categories. Currently, ICICI has two loan categories i.e. (1) loan amount <3 million and (2) loan amount > 3million.
For more details on the interest rates and tenures, customers can visit the ‘Home Loan Interest Rates’ page on the official website of the bank.
How to Apply for ICICI Home Loan
Customers can apply online by visiting the official website of ICICI Bank (www.icicibank.com). They can leave an online request for the bank officers to call them on the phone. Alternatively a SMS can be sent to 5676766 or can walk in to the nearest ICICI Bank branch and talk to the officers.
Home Loan Approvals
ICICI extends online e-approval system by which customers can enjoy the speedy disposal of their applications.
Online Tools from ICICI
ICICI Bank’s official website extends online tools like EMI Calculator, Cashback Calculator and Check Your Eligibility by using which the customers can have fair knowledge on EMIs, discounts (cash back) etc.
These tools are very simple to operate and are highly user friendly. Customers are requested to either select the data from dropdown menus or to type in few text boxes and the website would do the rest of the calculations and gives out the information fast.
Special Add-ons for ICICI Home Loans
ICICI Bank is offering ‘Home Insurance’ scheme which covers the home loan take by the consumer and protects him/her from the unexpected events of life. There are two insurance covers currently in offing i.e. Home Safe Plus and Home Protect. For more details on this, customers can visit the ‘Insure Your Home’ page on the official website of the bank.
Special Cash Back Offer from ICICI Home Loan
During October, 2012 ICICI Bank had announced a unique home loan product which offered 1% cash back on every EMI paid by the customers. This offer is applicable for the newly applied home loan customers only and the scheme is extended to those who transfer their home loans to ICICI from other banks.
The salient points of this Cash Back offer are:
- Under this offer, eligible customers would get the return of 1% of the monthly EMI.
- 1% cash back would start from the first payment of the EMI i.e. from the first month itself but the actual credit would take effect on paying the 36th EMI i.e. after 36 months of repayment of home loan.
- Thereafter, the 1% cash back credit would be deposited into the customers’ account after every 12 EMI payments.
- Customers can avail the cash back either by asking the bank to credit the amount in to their ICICI Bank account or adjust the entire cash back amount against the principal.
ICICI’s cash back offer is available on selective home loan products and is allowed till 30th June, 2013.
This unique offer was received well in the market and ICICI could able to garner more trust from the loan seekers. Many of the market observers felt that the scheme motto is to build the customer base and to reward the loyalty of the customers in a subtle way.
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