How Would ICICI Home Loan Interest Rate Save Money on Balance Transfer?

ICICI Bank, a name that only grows in prominence as the time moves along, is a leading player in India’s home finance segment. Offering the loan at attractive interest rates, the bank helps many realize their home dream. But there are many servicing the debt somewhere else at a higher rate of interest and missing out on the attractive rates that ICICI has on offer.

Since a home loan spans for about 20-30 years, a higher rate can so easily burn your pocket with increasing outflow of interest. ICICI Home Loan Interest Rate ranges from 8.55%-8.80% per annum. So, if you are servicing the debt at a lender charging you more than what’s the case at ICICI Bank, you need to mull the balance transfer option. The article would focus on the benefits of the balance transfer.

How Much of Interest likely to be Saved on Balance Transfer at ICICI Bank?

Even a difference of 0.50% in interest rate can bring substantial savings of interest repayment on transferring the outstanding balance. So, if your existing rate of interest is 9.50% on an ongoing home loan worth 60 lakhs, you can think of transferring the outstanding balance to ICICI Bank which can levy an interest rate of about 8.75% on the transferred balance. The difference in interest rates is as much as 0.75%. This promises to be a windfall of savings for you on switching your existing portfolio to ICICI Bank.

At 9.50%, the EMI applicable would be 55,928 assuming the loan is availed for 20 years. If the two years of the 20-year period is over, you are most likely to have an outstanding balance of 57,78,201. Continuing at this pace, the extent of interest repayment can go up to 74,22,689, humongous to say the least. You have paid 11,20,470 of interest so far. If you switch over the outstanding amount of 57,78,201, how much are the savings likely to be? Let’s check it out.

Firstly, the EMI would reduce to ₹53,211 with the total interest outflow likely to be 57,15,353, which when added to the interest paid so far equals to 68,35,823. Deduct the savings by 5,000-20,000, a switchover fee that can be charged, to reach a figure of 68,15,823-63,35,823. You are saving a total of 5,87,406 of interest with a balance transfer. The results of EMI and interest, as shown above, are due to Home Loan EMI Calculator ICICI. The calculator is on the ICICI Bank website to help you with the calculation.

How Can You Initiate Balance Transfer?

To start with, you must notify your existing lender to shift your outstanding balance through an application. The lender would provide you with the No Objection Certificate (NOC) as well as a statement showing the outstanding balance till date. Afterward, your responsibility lies in sending all these documents to ICICI Bank to process the switchover request. The bank will do a property verification to assess the property value while also keeping a tab on your credit score. After being satisfied in its process does the bank approve the transaction.

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