India's largest
private sector ICICI Bank had unveiled a new home loan product that will offer
borrowers cashback on every EMI (equated monthly installment) for the entire
tenure of the loan. The offer allows a customer to get 1% cashback on every EMI
for the entire loan tenure, the ICIC bank said.
Available with
immediate effect up to December 31, 2012.
The ICICI Bank said
in a statement, “Subsequently, the 1% cashback will be accumulated every EMI
month & get credited into the customer’s account after every 12th EMI
month”.
However, the cash
back that starts accruing from the first EMI will not be credited every month
into the customer's account. But is given after completion of 3 years, after
which it is given after every 12th EMI month.
If the customer does
not want the cash back to be credited into his account, he / she can avail it
in the form a principal pay-down.
Renewable Fixed
Interest Rate..!
ICICI Bank customers
will also get an option of a renewable fixed interest rate for the entire
period up to 20 years. . The bank will offer customers the option to renew
their fixed rate loans for a two (2) -, three (3) - or five (5) -year tenure at
a zero conversion fee, within 30 days of completion of the initial fixed rate
tenure.
The renewal can be
done multiple times till completion of the tenure. If the customer does not
renew the fixed rate loan, then it will move to a floating rate loan by
default.
The ICICI Bank said.
“The floating rate will be decided on the prevailing ICICI Bank base rate at
that point of time, plus the margin decided at the time of sanction of the
loan,”
The fixed rate of
interest for housing loans up to Rs. 30 lakh ranges between 10.25% and 10.75%.
For home loans above Rs. 30 lakh, the fixed rate is between 10.50% and 11%,
depending on the maturity period.
“After completion of
the initial fixed rate tenure, if a customer / home loan buyer decides to renew
his fixed rate housing loan, the renewable fixed rate will be decided on the
prevailing ICICI Bank base rate at that point of time, plus the margin decided
at the time of sanction of the loan,” the ICICI bank said.
EMIs for the new
housing loan product can only be paid through an auto debit to an ICICI Bank
account.
A spokesperson of
ICICI Bank said, “We want to build long lasting relationships with customers
and this product is a step in that direction. It is in line with our recent `My
Savings Reward Programme', which rewards customers for transactions done on
savings account.“
According to mumbai
based financial planners, the product is a marketing gimmick to attract
customers. The cashback benefit translates into a interest rate reduction
of 0.15%. A home loan seeker should
instead choose a bank offering lower interest rate on housing loans.
As on September,
2012, ICICI Bank's housing loans constituted 65.8% of the total retail book of
Rs. 93,300 crore.
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