ICICI Bank offers 1% cashback on every EMI of home loans
In a rush to grab the festive retail home loan share, ICICI Bank announced the launch of a new home loan, which offers borrowers the benefit of 1 percent cashback on every EMI, for the entire tenure of the loan.
It is available for home loans with a minimum tenure of 15 years to both residents as well as NRI (non-resident Indian) borrowers. However, the cashback will accrue only after a period of 3 years of EMI payment or the 36th EMI.
“This new home loan empowers borrowers to select their preferred mode of cashback. They can choose to utilise the cashback to prepay the principal outstanding of their home loan or take credit in their ICICI Bank account,” said ICICI Bank, India’s largest private sector bank by consolidated assets.
The interest rates for ICICI Bank home loans start at 8.35 percent for women and 8.40 percent for rest of the borrowers.
This comes just weeks after it launched a cashback offer of up to Rs 10,000 or 20 percent on its debit and credit card spends of minimum Rs 30,000 for its customers availing home loans in the three-month period from September 1 to November 30.
Given the tepid loan growth, especially on corporate loans, banks are rushing to pump up their retail loans to push up their revenue business.
Anup Bagchi, Executive Director, ICICI Bank said, “ICICI Bank catalysed the growth of retail lending in the country by making home, auto and other retail loans widely accessible and affordable. We foresee that a combination of young population and rapid urbanisation will lead to the emergence of growing demand for housing in the country.”
Key features of the new home loan offering
• Loan amount: For any amount (As per standard home loan offering of ICICI Bank)
• Loan tenure : 15 years – 30 years
• Eligibility : Both resident and non-resident customers are eligible to apply. They can also transfer their existing home loans to ICICI Bank.
• Flexible cashback modes: Customers can choose to adjust the cashback against principal outstanding of their home loan. Or, they can get it as direct credit in their bank account.
• Cashback accruals method: The cashback will start to accrue from the first EMI itself. It will first get credited to the customer after completion of 36th EMI. Subsequently, after every 12th EMI, it will get credited to the customer.
This new offer is also available for other mortgage products like loan against property, lease-rental discounting and top-ups on existing mortgage loans.
Currently, ICICI Bank claims to have the largest mortgage portfolio among private sector banks in the country with disbursement of mortgage loans crossing over Rs 1 trillion (Rs 1 lakh crore).
Just a day before, on Wednesday, real estate player Piramal Finance launched its wholly-owned subsidiary Piramal Housing Finance to extend retail home loans to salaried and self-employed individuals.
Ajay Piramal, Chairman of holding company Piramal Enterprises said, “Out of about 80 housing finance companies (HFCs), only 10 have asset size of more than Rs 10,000 crore and about 16 have more than Rs 5,000 crore. So, there are not many large players and a majority of HFCs do not understand real estate. Our strong partnerships with developers give us a unique edge.”