ICICI Home Loans India
Home Loans - FRR FAQs

 FAQS

1. My rate of interest is linked to FRR. How will it get affected by the rate change?

The FRR has been increased by 75 basis points (i.e. 0.75%) with effect from1st August, 2008.

FRR has changed from 13.5% to 14.25%.

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2. My rate of interest is linked to PLR. How will it get affected by the rate change?

The PLR has been increased by 75 basis points (i.e. 0.75%) with effect from1st August, 2008.

PLR has changed from 15.50% to 16.25%.

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3. My rate of interest is linked to IHPLR. How will it get affected by the rate change?

The IHPLR has been increased by 75 basis points (i.e. 0.75%) with effect from1st August, 2008.

IHPLR has changed from 15.50% to 16.25%.

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4. From when are the new rates applicable? Or
From when will the rate of interest on my Home loan be changed?

For all home loans with first disbursals before 4th July 2006, the rate of interest will be reset on a QUARTERLY basis. The reset dates for effecting the rate of interest changes for the above mentioned existing customers would be January 01, April 01, July 01 & October 01.
Thus, the change in the rate of interest will be effective from the next reset date i.e. from October 01, 2008.

For all home loans with first disbursals on or after 4th July 2006, the rate of interest will be reset on MONTHLY basis. The reset dates for effecting the rate of interest changes for these existing customers will be the first date of the coming month after reset.
Thus, the change in the rate of interest will be effective from the next reset date i.e. from August 01, 2008.

Thus, if you have taken the 1st disbursal before 4th July 2006, your reset date woule be October 01, 2008 and if you have taken the 1st disbursal on or after 4th July 2006, the reset will be done on August 01, 2008.

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5. I am an existing customer of home loans and have taken the loan on Floating rate. How will the change in rate affect me?

The rate of interest on your loan would increase by 0.75% (75 basis points) due to recent change in the FRR/PLR/IHPLR on July 31st 2008. This will correspondingly, increase the Interest Rate on your Adjustable rate home loan.

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6. What is the impact as my floating rate loan is fully disbursed?

In case of existing disbursements the new FRR/PLR/IHPLR will be applicable from the next reset date i.e. August 01, 2008/ October 01, 2008 as applicable.

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7. What is the impact as my floating rate loan is partly disbursed?

For all past disbursements, the new rates will be applicable on the disbursed amount from the next reset date i.e. August 01, 2008 or October 01, 2008 as applicable.

All further disbursements would be at the revised rates.

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8. I have taken a sanction on floating rate and have not availed any disbursement till date, how will the change impact me?

If you have taken a floating rate loan, the rate of interest on your disbursement amount would be 0.75% higher than the rate as specified on your sanction letter due to the change in FRR/ PLR/ IHPLR by 0.75%. The rate would increase, as the rates are subject to change in FRR/ PLR/ IHPLR.

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9. What is my new loan tenor? OR By how many months will my loan tenor increase?

Your new loan tenor would be dependent on the number of years that are remaining for your loan and your rate of interest. You will be receiving a communication regarding the same shortly.

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10. My loan tenure is more than 20 years? What will be the change in my loan tenure? OR
My loan is at a different rate of interest? What will be the change in my tenor?

For these details, we request you to please walk-in to your nearest home loans branch.

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11. What is my new EMI? OR How much has my EMI increased by? Will my current EMI cheques have to be changed and where do I have to submit them?

You will be receiving a communication informing you about your revised EMI and loan tenure. The same communication will include the process for changing your EMI. In case of further clarifications or to know about the reset process, you can also visit your nearest home loans branch.

In case you wish to change your EMI keeping the loan tenor same, you can contact our nearest Home Loan branch. There would be no additional charges if you want to increase your EMI.

Alternatively, you can also also make part prepayment of your Home Loan. There is no charge on part pre-payment.

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12. What should I do to change my EMI? Will there be any charges if I want to increase my EMI?

To change your EMI you can contact our nearest Home Loan branch. There would be no additional charges applicable for increasing your EMI.

Please carry 36 cheques with you, as the earlier cheques would need to be replaced.

In case you have opted for ECS as repayment mode for your loan and your final disbursement was taken after July 01, 2007, you are requested to come to our branch and submit a new mandate.

However, in In case you have opted for ECS (your final disbursement was taken before July 01, 2007) or AD as your mode of repayment, you dont need to change the current mandate.

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13. I have taken a loan after July 31, 2008 at the revised FRR of 14.25%. Will my rate change?

As your loan has been sanctioned or disbursed on the new FRR of 14.25%, there will not be any change in rate due to the change in FRR of July 31, 2008.
Or

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14. I have taken a loan after July 31, 2008 at the revised IHPLR of 16.25%. Will my rate change?

As your loan has been sanctioned or disbursed on the new IHPLR of 16.25%, there will not be any change in rate due to the change in IHPLR of July 31, 2008.

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15. I have taken a loan under your MaxMoney scheme, what would be the impact on my EMI?

In Max Money Loan scheme the Primary period EMI covers only interest. As the rate of interest has increased, the EMI will need to be increased. Consequently you will have to give us new PDCs or an ECS mandate for the new EMI.

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16. I have just switched my loan to Floating ROI, how will the changes impact me?

If you have switched to Floating Rate and have availed full disbursement
The new rates will be applicable to your loan from the next reset date i.e. August 01, 2008/October 01, 2008 as applicable.

If you have switched to Floating Rate and have availed part disbursement
For all past disbursements, the new rates will be applicable on the disbursed amount from the next reset date i.e. August 01, 2008 or October 01, 2008 as applicable.

When you avail further disbursement, the fresh disbursements will be at new rates.

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17. I am a Fixed rate loan customer, what is the new rate in my case?

If you have opted for fixed rate of interest the impact of the change in your rates would be based on the stage of your loan disbursement.

17) (a) I have availed full disbursement how will the rate change impact me? There would be no change in your rate.

17) (b) I have taken a part disbursement how will this change in interest rate affect me? What rate will I get?


Fixed rate loan – if you take subsequent disbursement within 30 days from date of sanction If you have taken a fixed rate loan, the rate of interest on the already disbursed amount will not change. If the new disbursement is within 30 days from date of sanction than the rate applicable on the new disbursement would be same as the rate mentioned in your sanction letter.

Fixed rate loan – if you take subsequent disbursement after 30 days from date of sanction If you have taken a fixed rate loan, the rate of interest on the already disbursed amount will not change with the FRR/IHPLR change. If the 30 days period from the date of sanction has expired than on the new disbursement of your balance loan amount the rate applied would be as applicable at the time of disbursement. The rate of interest on the total loan amount disbursed will be the weighted average rate of interest.

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18. I have just taken a fixed rate loan sanction (up to 30 days prior to July 31, 2008)? Will I get the rate mentioned on my sanction letter?

The fixed rates are fixed at the time when you take the disbursement. However, as you have just availed a sanction for a fixed rate of interest loan, the interest rate is valid for a period of 30 days from the sanction letter date. If the disbursement is availed within a period of 30 days from the date of the sanction letter, you can avail the loan at the rate of interest as mentioned on your sanction letter. Post 30 days from the date of the sanction letter, the new rate of interest will be applicable.

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19. I have just switched my loan to fixed ROI before July 31 2008, how will the changes impact me?

If you have switched to Fixed Rate and have availed Full disbursement
The new rates will not impact your loan

If you have switched to Fixed Rate and have availed part disbursement
The rate of interest on the already disbursed amount will not change. For your balance loan amount the rate applied would be as applicable at the time of disbursement. The rate of interest on the total loan will be the weighted average rate of interest.

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20. What is the increase in I BAR?

The I BAR has been increased by 0.75%. The revised I BAR with effect from August 01, 2008 is 17.25%.

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21. I have taken property overdraft facility, from when will the new rate be applicable for me?

The I BAR has been increased by 0.75% from 16.5% to 17.25% on July 31, 2008, thus the rate on your Property Overdraft Facility would change with effect from August 01, 2008.

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22. How will the new rate affect my tax savings / IT benefits?

The total interest payable by you i.e. inclusive of the increased interest amount would qualify for deduction under Section 24 for income tax purpose up to overall limit of Rs. 150,000/-. So you will continue to enjoy the tax benefits.
Principal repayments would qualify for deduction from taxable income under Section 80C up to overall limit of Rs. 1,00,000/-.

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23. I had availed of a home insurance LoanShield / HomeSafe Plus / HomeAssure. How will it get affected due to the change in rate of interest?

In case the customer had availed of LoanShield / HomeSafePlus by ICICILombard
The insurance cover is applicable for a period of 5 years from the first disbursement of the home loan and will continue to be applicable for the 5 year period.

In case the customer had availed of HomeAssure by ICICIPrudential
The insurance cover is applicable for original loan tenure and will continue to be applicable for the original loan tenure. The insured amount is the loan outstanding (as per the original amortization schedule) at the time of death.

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24. What will be my new repayment / amortization schedule? Can I get my new repayment schedule?

In case you would like to know about your changed tenor you can either walk in to a branch or write to customer.care@icicibank.com.

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25. Can I change my current loan from a floating rate loan to a fixed rate loan? What will be the rate that I will get? Are there any fees that I will have to pay for switching?

Yes, you can change your current loan from a floating rate loan to a fixed rate loan. The fixed rate of interest for home loans would be the prevailing rate as applicable at the time when you approach Home Loan Branch for switching from Floating rate to Fixed rate.

To change from Floating rate to Fixed rate loan you will have to pay a switch fee of 1.75% (+ applicable service tax) on your outstanding loan amount at the time of such switch.

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26. Can I change my current loan from a floating rate loan to a fixed rate loan with MMC clause?

Conversion from floating rate loan to a fixed rate loan with MMC clause is not allowed.

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27. What is the process for changing from a floating rate home loan to a fixed rate home loan?

For changing from a floating rate home loan to a fixed rate home loan you will have to execute an amendatory loan agreement for switch and pay a fee of 1.75% (+ applicable service tax) on your outstanding loan amount. For this you should approach a Home Loan branch.

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28. Can I close my home loan? What is the charge for foreclosing my loan?

You can make part prepayment of your Home Loan. There is no charge on part pre-payment of your home loan.

Incase you foreclose your loan, you will be charged forclosure charges of 2% (+ applicable service tax) on the outstanding amount in your loan account at the time of foreclosure and amounts prepaid in the last one year, if any.

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29. Are the interest rates going to increase again in the future?

These are market determined rates and it is not possible for us to predict interest rate movements.

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30. On what basis does the FRR/IHPLR/PLR change? / Why the rates have been changed?

The FRR and PLR are benchmark reference rates of the ICICI Bank Home Loan and IHPLR is a benchmark reference rate of ICICI HFC. This is determined based on the market conditions and the cost of funds of ICICI Bank and ICICI HFC respectively. As the cost of funds has increased, we have increased the FRR / PLR / IHPLR.

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31. I am an existing customer, why is the rate of interest higher than the new customers?

The rate of interest depends on the prevailing rate at the time of disbursement. It could also be different because of special schemes offered by ICICI Bank from time to time.

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32. I just took a loan in June / July 2008, why didn’t you tell me of the potential increase in the rate of interest?

The rates of interest are determined based on market conditions and we are not in a position to predict the rates of interest for the future.

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33. My rate of interest increased by 75 basis points from July 01, 2008. Will this new change in the rate of interest impact me ?

Yes, your rate will increase by 0.75%.

For all home loans with first disbursals before 4th July 2006 , the rate of interest will be reset on a QUARTERLY basis. The reset dates for effecting the rate of interest changes for the above mentioned existing customers would be January 01, April 01, July 01 & October 01.
Thus, the increase in your rate of interest by 75 basis points (0.75%) has already happened, effective from July 01, 2008 and an additional increase of 75 basis points (0.75%) will happen from October 01, 2008.

For all home loans with first disbursals on or after 4th July 2006 , the rate of interest will be reset on MONTHLY basis. The reset dates for effecting the rate of interest changes for these existing customers will be the first date of the coming month after reset.
Thus, the increase in your rate of interest by 75 basis points(0.75%) has already happened, effective from July 01, 2008 and an additional increase of 75 basis points  (0.75%) will happen from August 01, 2008.

Hence there has been a total increase of 150 basis points (1.5%) since July 01, 2008.

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34. When will I receive any communication on the change of interest rate?

A reset letter will be dispatched to you, which will mention the combined increase in the FRR, PLR and IHPLR, with effect from July 01, 2008 and August 01, 2008 or October 01, 2008 as applicable.

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