ICICI Bank is charging 13.25 % for home loan

I took my home loan from ICICI bank in Year 2004 and started paying EMI in FEB 2005 at an interest rate of 7.25 %. When interest rates for home loans started increasing in India, ICICI bank was leading the show by charging maximum interest rate compared to other private banks in India. Interest rate kept increasing since then and I always found that ICICI bank was charging more than what is being offered by the market.

I made 2 pre-payments against my home loan in order to reduce the principal amount so home loan can be finished earlier as my pay-off tenure was increasing as well with the interest rates. Also, when I look at my amortization schedule, it seems that ICICI has increased the interest rate both the times when I made pre-payment.

Currently I am paying an interest rate of 13.25 % (though I checked with all my friends who have home loan from ICICI bank and everybody else is paying 12.5 % only).

I checked with bank also for my interest rates being higher than others but they gave me some unconvincing answers. I would like to know if somebody else is also facing unethical behavior from ICICI bank for their home loans and if anything can be done to fix this.

Thanks in advance.

Comment On This

Dear Chanda Kochhar Madam,

This is with reference to the above subject.

I had the most harrowing experience from ICICI Home Loan Department in Borivali(W) from the customer service representative.

I went to the Borivali(W) branch around a month back to enquire about how to convert the existing home loan to the new rates and again went on 30th Jan 2010 and met with the same customer service representative but both the times she gave me different details on the schemes available for conversion and second time she even told me that there is no scheme available for conversion and she has never told me about any such scheme.She even failed to recognize me and told me that nothing can be done.

I had taken Home Loan in 2004 and my current rate is 12.75% floating, my FRR/PLR is 0.75%,so effective rate is 12%.

During my first visit , I asked the customer service representative on the process for conversion and she told me that I will have to pay 1.75%+service tax to convert my old home loan to new rates of 8.75%. I told her that this is not fair and there should be something for the existing home loans customers to convert their old rates to new ones without any charges.

She first made some faces and then told me that she can give me 8.25% fixed for 2 years and floating rate thereafter with no conversion charges if I make an Investment of INR 50,000/- per year in ICICI Purdential's Retirement Plan with no entry and exit loads.She was very keen to sell the Investment Plan and was not bothered to listen to my problem. I told her I cannot make the investment, so she told me that I will have to pay the conversion charges.

I do not understand why ICICI Bank wants to penalize all its old customer's with such conditions and lack of transparency, why does the bank want to charge any conversion rates for customers who wish to increase their variance, why is ICICI Bank asking its representatives to sell ICICI Prudential Products to convert old home loan rates to new.

Such behavior from customer service representative of such a reputed bank baffles me completely.

I have the below requests to ICICI Bank:

1.Convert my existing Home Loan to New Home Loan rates and give me a Variance of 4% fixed for the entire tenure.

2.This conversion should be done without charging any fees.

3.I should not be asked to invest in any ICICI Prudential Plan.

I request for an early resolution to my problems.

My Home Loan Account No is:LBMUM00000842460

My Contact Details are

Hitesh K Soni

9821475857 (M)