FRR/ PLR/ IHPLR Change – FAQs
ICICI Bank has reduced its floating rate of reference (FRR/PLR/IHPLR) for Home Loans by 50 bps (i.e. 0.50%). ICICI Bank has reduced its FRR from 13.25% to 12.75% and its PLR 15.25% to 14.75%. ICICI Home Finance Company has reduced its IHPLR from 15.25% to 14.75%.
This will lead to the reduction of Interest rates of 50 bps (0.50%) for all existing floating rate customers. There is no change in rates for new customers.
The above rates are effective from June 04, 2009.
FLOATING RATE LOAN
My rate of interest is linked to FRR. How will it get affected by the rate change?
The FRR has been reduced by 50 basis points (i.e. 0.50%) from 13.25% to 12.75% with effect from June 4, 2009. Thus, your rate of interest will go down by 50 basis points (i.e. 0.50%).
My rate of interest is linked to PLR. How will it get affected by the rate change?
The PLR has been reduced by 50 basis points (i.e. 0.50%) with effect from June 04, 2009 from 15.25% to 14.75% with effect from June 4, 2009. Thus, your rate of interest will go down by 50 basis points (i.e. 0.50%).
My rate of interest is linked to IHPLR. How will it get affected by the rate change?
The IHPLR has been reduced by 50 basis points (i.e. 0.50%) from 15.25% to 14.75% with effect from June 4, 2009. Thus, your rate of interest will go down by 50 basis points (i.e. 0.50%).
From when are the new rates applicable?
The new rate of interest is applicable from June 4, 2009. For disbursements which have already been availed of on or before June 4, 2009, the change in the rate of interest will be effective from the next reset date i.e. July 1, 2009.
Why is the reset done from July 01, 2009?
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 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 July 01, 2009.
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 July 01, 2009 as applicable.
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 reduce by 50 basis points (i.e. 0.50%) due to the change in the FRR/ PLR/ IHPLR on June 04, 2009 This will correspondingly reduce the Interest Rate on your adjustable rate home loan and will impact your EMI or tenor. As ICICI Bank/ HFC is collecting its home loan EMIs in arrears, the EMIs of July which will be banked in August 2009 will be banked for the reduced EMIs incase of EMI Reduction. (The EMI collected during July EMI cycles are for the month of June 09).
What is the impact as my floating rate loan is fully disbursed?
In case your loan is fully disbursed, the rate of interest on your loan will be reduced by 50 basis points (0.50%). The new FRR/ PLR/ IHPLR will be applicable from the next reset date i.e. July 01, 2009.
What is the impact as my floating rate loan is partly disbursed?
Your interest rate will reduce by 50 basis points (0.50%) in line with reduction in FRR/ PLR/ IHPLR. All further disbursements would be at the revised rates.
I have taken a sanction on floating rate and have not availed any disbursement till date, how will the change impact me?
Your rate of interest is valid for 30 days from the date of sanction, subject to change in FRR/ PLR/ IHPLR. In case you take disbursement within 30 days of sanction, your rate of interest will go down by 50 bps (0.50%). In case you take the disbursement after 30 days of sanction, the prevailing floating rate will apply.
What is my new loan tenor?
Your new loan tenor would be dependent on the number of years that are remaining for your loan and your rate of interest.
This rate reduction will impact your EMI or tenor. We will be sending a text message regarding the same on or after July 15, 2009. For further details, you may walk into any ICICI Home Loans branch on or after July 15, 2009 or contact our Customer Care.
By how many months will my loan tenor reduce?
Your new loan tenor would be dependent on the number of years that are remaining for your loan and your rate of interest.
This rate reduction will impact your EMI or tenor. We will be sending a text message regarding the same on or after July 15, 2009. For further details, you can also walk into your nearest ICICI Home Loans branch on or after July 15, 2009 or contact our Customer Care.
My loan Tenor is more than 20 years? What will be the change in my loan tenor?
This rate reduction will impact your EMI or tenor. We will be sending a text message regarding the same on or after July 15, 2009. For further details, you may walk into any ICICI Home Loans branch on or after July 15, 2009 or contact our Customer Care.
My loan is at a different rate of interest? What will be the change in my tenor?
This rate reduction will impact your EMI or tenor. We will be sending a text message regarding the same on or after July 15, 2009. For further details, you may walk into any ICICI Home Loans branch on or after July 15, 2009 or contact our Customer Care.
What is my new EMI? Will my current EMI cheques have to be changed and where do I have to submit them?
This rate reduction will impact your EMI or tenor. We will be sending a text communication regarding the same on or after July 15, 2009. The same communication will include the process for changing your EMI. In case of further clarifications or to know about the reset process, you may visit any ICICI Home Loans branch on or after July 15, 2009 or call our Customer Care.
What should I do to change my EMI? Will there be any charges if I want to change my EMI?
This rate reduction will impact your EMI or tenor. We will be sending a text message regarding the same on or after July 15, 2009.
If you wish to further change your EMI, you may visit any ICICI Home Loans branch on or after July 15, 2009 or contact our Customer Care. There would be no additional charges applicable for changing your EMI.
I have taken a loan after June 04, 2009 at the revised FRR of 12.75%. Will my rate change?
As your loan has been sanctioned or disbursed at the new FRR of 12.75%, there will be no change in the rate due to the change in FRR of June 4, 2009.
I have taken a loan after June 04, 2009 at the revised IHPLR of 14.75%. Will my rate change?
As your loan has been sanctioned or disbursed at the new IHPLR of 14.75%, there will be no change in the rate due to the change in IHPLR of June 4, 2009.
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 reduced, the EMI will need to be reduced. Consequently, you will have to give us new PDCs or an ECS mandate for the new EMI.
I have just switched my loan to Floating ROI, how will the changes impact me?
The new rates will be applicable to your loan from the next reset date i.e. July 1, 2009.
FIXED RATE LOANS
I am a fixed rate loan customer, what is the new rate in my case?
If you have opted for fixed rate of interest, there would be no change in your rate.
I am a Fixed rate loan customer. I have availed full disbursement. How will the rate change impact me?
There would be no change in your rate.
I am a Fixed rate loan customer. I have taken a part disbursement. How will this change in interest rate affect me? What rate will I get?
If you have taken a fixed rate loan, the rate of interest on the already disbursed amount will not change with the FRR/ PLR/ IHPLR change. However, the subsequent disbursements will be at the new fixed rate of interest. The rate of interest on the total loan amount disbursed will be the weighted average rate of interest.
I have just taken a fixed rate loan sanction. Will I get the rate mentioned on my sanction letter?
Your interest rate is valid for 30 days from the date of sanction, subject to change in FRR/ PLR/ IHPLR. The fixed rates are fixed at the time when you take the disbursement. If you have already taken part disbursement, the rate of interest on the already disbursed amount will not change. However the subsequent disbursements will be at the new fixed rate of interest. The rate of interest on the total loan amount disbursed will be the weighted average rate of interest.
I have just switched my loan to fixed ROI before June 04, 2009. How will the changes impact me?
If you have switched to fixed rate and have availed of full disbursement, the new rates will not impact your loan.
If you have switched to fixed rate and have availed of 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.
INCOME TAX BENEFITS
How will the new rate affect my tax savings / IT benefits?
The total interest payable by you i.e. inclusive of the reduced interest amount would qualify for deduction under Section 24 for income tax purpose up to an overall limit of Rs.1,50,000. So you will continue to enjoy tax benefits.
Principal repayments would qualify for deduction from taxable income under Section 80C up to an overall limit of Rs. 1,00,000.
INSURANCE BENEFITS
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 you had availed of Loan Shield/ Home Safe Plus by ICICI Lombard, 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 you had availed of Home Assure by ICICI Prudential, the insurance cover is applicable for the original loan tenor and will continue to be applicable for it. The insured amount is the loan outstanding (as per the original amortization schedule) at the time of death.
FUTURE ACTION
What will be my new repayment / amortization schedule? Can I get my new repayment schedule?
In case you wish to know about your changed tenor, you may either walk into any ICICI Home Loans branch, contact our Customer Care or e-mail to customer.care@icicihfc.com.
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 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 the Home Loans branch for switching from floating rate to fixed rate.
To change from floating rate to fixed rate loan, you will have to pay switching charges of 1.75% (+ applicable service tax) on your outstanding loan amount at the time of such switch.
Can I change my current loan from a floating rate loan to a fixed rate loan with MMC clause?
Conversion from floating rate to a fixed rate loan with MMC clause is not allowed.
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 the switch and pay a fee of 1.75% (+ applicable service tax) on your outstanding loan amount. For this, you would have to approach a Home Loans branch.
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.
In case you foreclose your loan, you will be charged foreclosure charges of 2% (+ applicable service tax) on the outstanding amount in your loan account at the time of the foreclosure and amounts prepaid in the last one year, if any.
GENERAL
Are the interest rates going to reduce again in the future?
These are market determined rates and it is not possible for us to predict rate of interest movements.
On what basis does the FRR/ IHPLR/ PLR change?
The FRR and PLR are benchmark reference rates of ICICI Bank Home Loans and IHPLR is a benchmark reference rate of ICICI HFC. They are determined, based on the market conditions and the cost of funds of ICICI Bank and ICICI HFC respectively. As the cost of funds has reduced, we have reduced the FRR/ PLR/ IHPLR.
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/ ICICI HFC from time to time.
When will I receive communication on the change in the rate of interest?
You will be receiving a text message on or after July 15, 2009 informing you about the change in the rate of interest. Alternatively, you may call Customer Care. We will also be sending you a reset letter, which will mention the final changes in the FRR, PLR and IHPLR as applicable with effect from June 4, 2009.
