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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