I have a ICICI Home Loan and that is the worst mistake of my life. ICICI interest rates are the highest in the market and their after sale service just sucks and to top it, they have put
riders of all sorts so that the customer cannot leave them once he gets into their clutches.
*(1) July, 2006:
*I start looking for a home loan. I am approached by an ICICI executive from Bangalore Koramangala branch. I also approached by HDFC Bank. Then on, whatever deal HDFC offers, ICICI betters the offer, promises me an unbelievable interest rate of 9% (HDFC were giving 9.5%)
and only 7k as administrative charges and no other processing fees. I fall into their trap. On the approval, the final rate is 9.25% and the processing fees have reached 10k. This is just the tip of the iceberg called cheating. The executive says the loan is approved now, you cannot go back. In case, you want to go away, you loose the processing fees.
*(2) August, 2006:
*The loan is approved. The disbursements start. I never have to go to the bank and I feel, it is still okay. Now, the home loan rates start going up and I am still paying a pre-emi. The Pre-emi is hiked without my knowledge.
Later too, the interest rates are hiked and I am not intimated. The customer care claim that they keep sending periodic letters which mysteriously I never get!!!
(3) January 2007:
My pre-emi bounces because of change in interest rate and pre-emi increaing by 5k and as usual I am not informed. I go to the customer care branch and they say you have to pay a fine. I refuse and fight (was not my fault after all). Finally the fine is waived off.
(4) Sep 2007:
Home loan rates keep on rising and ICICI Home loans are always ahead in terms of hikes. My interest shoots to 11.75% (it is 12.5% now). No intimation again. With every repo-rate and CRR hike from RBI, ICICI is the last to increase their Bench Mark Lending Rate (They let the other banks take a lead in this and let them acquire a bad name and then quietely increase their interest rates in the end. VERY SHREWD)
*(5) Nov 2007 - April - 2008:
*All leading banks keep cutting rates, ICICI say that they will wait and watch, and donot cut rates.
*(6) May/June 2008:
RBI hikes the lending rates again (repo rate is hiked twice and CRR is also hiked). All banks have to hike. NOW THE CATCH IS ALL THESE BANKS HAD REDUCED THE RATES WHEN RBI HAD CUT RATES (ICICI WAS DOING A WAIT AND WATCH) AND SO ALL BANKS THAT HAD REDUCED THE RATES, HIKE THE RATE AGAIN.ICICI again, waits and watches and then its the last bank to increase its rates. This hike being unfair since in the first place it never lowered the hiked rate when other banks reduced their interest rates. ICICI bank does it again. *
Further, unlike most banks like PSU banks and private banks like Axis bank, ICICI bank doesnot have any cash inflow in the form of Saving Accounts, Fixed deposits and other long term savings and relies heavily on lending from RBI and others to fund loans and so any variation in the markets affect interest rates adversely.
(7) MOST IMPORTANT:
ICICI doesnot communicate any benefits to existing customers, all benefits and discounts are meant for new customers. So when RBI hikes rates, ICICI increases the interest rates but when RBI decreases the rates, ICICI doesnot slash its rates like other banks, they wait and watch (you decide what to call this policy). They will quietely pass on benefits of a lower interest rate to new customers, ignoring the existing customers.
(8) Customer care: Worst
-No communication arrives once you are a customer (at least it didnt for me).
-The customer care centres are overburdened and the executives stressed. For instance, the wait period on Saturdays is generally 3-4 hours, some part of which you are expected to stand. They expect you to come during your working hours taking a leave from your work to avoid rush hours on weekends.
-The customer care executives are ill informed and each one of them will tell you a different story.
(9) Once you are in, you cannot move out!!!!!
A very high penalty of 2.25% incase of prepayment by any ways (balance transfer/Prepayment). Most banks charge you only for balance transfer.
*(10) I try to move out: I am paying 2.25% on outstanding amount!!
* They say that lets negotiate and offer me a cut of .75% on the interest and then coolly tell me that you will have to pay a fine of 1.75% on all outstanding principal. Now just look at their nerve, they have been overcharging me for 2 years and now they want me to pay for it too!!!!
(11) AND TO TOP IT:
The same executive who got me the loan and whom I got business worth Rs. 1 crore from friends as well, doesnot even acknowledge me now!!
(12) Moral of the story:
*Stay away from ICICI.
* Go to all banks, do a survey. ICICI will ofcourse provide you the best deal, but dont be lured by their offer and stay away.
Check all banks' policies,
- How they treat new and old customers. A bank like Axis, which doesnot give you any special offers and has the same rate for all corporates and existing and new customers, is bound to be honest.
- Check for such riders as,
- What are the penalties and charges in case you want to fore close the loan.
-Ask for a discount on the PLR. Remeber the PLR varies but discount remains constant.
-Bargain on the porcessing charges.
-Try to approach as a group. This way you can bargain and extract a better deal.
-Dont fall prey to marketting gimmicks that say today is the last day for so and so scheme and you can get a lower interest rate if you apply today. All these are just gimmicks. Rates are applicable as on the day the loan is approved.
For any help, please leave me a M2M. I will be happy to help.
