[ecis2016.org] Self-employed individuals will have to pay 6.8% interest on home loans
After the Reserve bank of India announced a sharp hike in its repo rate, on June 8, 2022, leading private lender ICICI Bank has announced one of the sharpest increases in its home loan rates. Effective June 8, 2022, home loans at the bank will be issued at the minimal rate of 8.60%.
You are reading: ICICI home loan interest rate: All you need to know
Also see: How to check ICICI Bank home loan status
“ICICI Bank External Benchmark Lending Rate (I-EBLR) is referenced to the RBI policy repo rate with a mark-up over repo rate. I-EBLR is 8.60% p.a. effective June 8, 2022,” the bank announced on its website.
All about ICICI Bank home loan
Among the private lenders that offer home loans at competitive rates, is India’s second-largest private lender, ICICI Bank. In this article, we will discuss ICICI Bank home loans and if it is a good product, as far as borrowers are concerned.
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Loan types: Fixed and floating
The private lender offers loans on floating and fixed rates. ICICI Bank’s floating rate home loan is now linked with the repo rate. Loans that are linked to the floating rate are expected to change every time the RBI makes a change in the repo rate at its bi-monthly monetary policy. Loans offered at fixed rates are fixed only for a limited period (between five and 10 years, depending on the entire tenure). After that period is over, a home loan with a fixed rate is as good as a home loan on floating rates.
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ICICI Bank home loan interest rate
ICICI Bank’s floating rates are linked with the Reserve Bank of India’s (RBI’s) repo rate, the rate at which the banking regulator lends money to scheduled banks. Following a RBI mandate, the bank has linked its loans to the repo rate starting from October 1, 2019.
Borrowers must note here that old home loans, where the borrower has not made an application to the bank to switch to the new regime, are linked with old benchmarks such as the marginal cost of funds-based lending rate (MCLR) or base rate.
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Important facts about ICICI Bank home loan
| Current interest rate range | 8.60% |
| Interest rate for women | 8.55% |
| Highest tenure | 30 years |
| Shortest tenure | 3 years |
| Processing fee | 0.50% of the loan amount |
| Highest loan amount | Rs 10 crores |
| Lowest loan amount | Rs 5 lakhs |
ICICI Bank home loan eligibility
The bank offers borrowers loans, depending on various factors. These include age, residency status and employment status.
| Eligibility criterion | Particulars |
| Age | 21-6o for Indians and 21-65 for NRIs |
| Residency | Resident Indians and NRIs |
| Employment status | Salaried, self employed |
Documents needed for ICICI Bank home loan
Among the documents that a home loan applicant will have to submit with the ICICI Bank along with his home loan application are:
- Passport size photographs of the applicant
- Copy of PAN
- Copy of Aadhaar Card
- Copy of Voter ID
- Copy of passport (Must in case of NRI applicant)
- Copy of bank statement for the past 6 months
- A cancelled cheque
- Latest income tax returns
- Property documents
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How to check ICICI Bank home loan status?
Here is how to check your ICICI Bank home loan application status in five steps:
- Visit https://www.icicibank.com
- Select the ‘Products’ tab and then ‘Loan’ and ‘Home loan’ subsections after that.
- On the Home Loan page, Click on ‘Know More’ which will redirect you to ‘Know Your Loan Application Status’ page.
- Now, key in your application number and mobile number, and click on the ‘Send OTP’ button.
- After you key in the OTP, the status of your application would be shown on the screen.
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How to check ICICI Bank home loan statement?
Step 1: Log on to your ICICI net-banking.
Step 2: Click on the tab Estatements.
Step 3: Select your home loan account and the period for which you need the statement.
Step 4: Generate the statement in PDF format.
Read in detail about how to check ICICI home loan statement
What is ICICI Bank home loan certificate?
A borrower has to submit an interest certificate with his employee to claim tax deduction on home loan repayment. The interest certificate, issued by the bank as and when requested by the borrower, acts as a proof to claim tax deductions. The borrower can go to his closest branch and request for an interest certificate. He doesn’t necessarily have to go to his home branch for this purpose. An interest certificate can also be accessed online though your net-banking.
When does it make sense to take a home loan from ICICI Bank?
ICICI Bank is one of the leading financial institutions in India, and offers home loan at competitive rates. However, existing account holders can negotiate and get home loans on lower interest considering the bank is familiar with the customer and his credit history.
How much of a property value can you get as a loan from ICICI Bank as home loan?
The banks may offer as much as 90% of the property value as loan, depending on the loan amount and the applicant’s credit history.
All about ICICI Bank home loan moratorium
After the RBI, on March 27, 2020, announced a three-month moratorium on term loans as part of its COVID-19 relief package, several banks, including ICICI Bank, have started to provide their customers with temporary relief. During the three-month period covered under the moratorium, customers will not have to pay the EMI for their ICICI home loan.
Do note here that the moratorium is a temporary deferment of payment of interest/ principal/ instalments. It is not a waiver and interest will continue to accrue on the outstanding portion of the loan/credit facility, during the moratorium period.
Period covered
March 1, 2020 to September 30, 2020
Terms and conditions
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You have to opt in or opt out: Those servicing a home loan with ICICI Bank will have to either opt in or opt out from the moratorium facility. This could be done using the link sent to the customers through SMS and emails. Alternatively, you could visit the official website of the bank, www.icicibank.com, to do so. In case you do not opt for the home loan moratorium, the home loan EMI will be deducted as usual. If you have two home loans from the bank, you will have to apply for both, separately.
Impact of home loan moratorium on EMI
If you pay a home loan EMI of Rs 50,000 every month, you do not have to pay it for March, April and May, under the moratorium. Starting June 2020, the bank will include the Rs 1.50 lakh outstanding in your home loan principal amount and charge interest on the entire amount. Interest will continue to accrue on the outstanding portion of the loan, during the moratorium period.
Basically, you must take into account that the interest on the loan gets postponed by three months but continues to accrue on your account and results in higher cost.
Example
Alok Varma is servicing a home loan with ICICI Bank, with the principal outstanding of Rs 50 lakhs and residual tenure of 180 months. He has decided to avail of the moratorium facility to defer his EMIs that are due on April 1 and May 01, 2020. In this case, his revised tenure would increase from 180 to 186 months, to recover the additional accrued interest of Rs 2,58,914, keeping the instalment amount unchanged.
Future deduction
To adjust the additional payment, ICICI Bank will increase the loan tenure period. If increasing the tenure is not a possibility, the EMI amount would be increased.
Impact of EMI moratorium on credit score
The delay in your EMI would not reflect in your credit history as default, as per the guidelines issued by the RBI.
How to opt for ICICI Bank EMI moratorium?
What if you want to opt for the moratorium?
You have to ‘OPT-IN’ through the SMS, or emailer sent by the bank. You could also go to the bank’s official website to do the same.
What if you have already paid the EMI for March?
For the EMI paid prior to March 27, the bank will not provide any refund. The benefit could be availed of only in the next month.
What if you do not want to opt for the moratorium?
The EMI would be deducted from our account, unless you submit an application with the bank. So, no action is required on the part of those home loan borrowers who want to continue paying their EMIs.
FAQs on ICICI Bank home loan
Why interest rates vary for applicants for the same loan amount?
Borrowers pay different interest for the same amount of loan depending on their credit history, category (self-employed or salaried), availability of documents and loan-to-value ratio.
What is the difference between interest rate for self-employed and salaried home loan borrowers in ICICI Bank?
Home loans to self-employed borrowers are offered at slightly higher rates (25 basis points higher), factoring in the higher risk exposure to the bank.
Do I have to pay extra charge if I pre-pay my ICICI Bank home loan?
On floating home loans, there is no penalty when a borrower pre-pays the home loan. The same is not true of fixed rate home loans.
Can I pick between fixed and floating rate at ICICI Bank?
Yes, depending on his requirements, a borrower can choose between floating and fixed home loan rates.
What happens to my home loan when ICICI Bank changes rates?
Home loans that are linked with the repo rate are likely to change along with changes in the RBI-decided rates. In case the loan is linked with old benchmarks, the customer has to make a request to the bank to affect changes since it is not automatically done after the RBI changes rates.
What period is covered under ICICI home loan EMI moratorium?
Time between March 1, 2020, and May 30, 2020, is covered under SBI home loan EMI moratorium?
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