I had taken home loan from ICICI in Nov 2003 at 7.75% interest rate and they have now made that to 11.75%. I had couple of good experiences though
1. Processing was really quick and I was not bothered by asking for more documents etc
2. After the approval, I asked for enhancement & that too was done very quickly & again here - not at all troubled by documentation.
But the bad things are the serious ones.. here it goes.. The increase in interest rate happens every 6 months & its very frustrating to know that they does this only to the existing customers. What usually they does is change the margin. For eg. When they disburse loan PLR =12% & Margin = 3%. So your effective rate is 9%. After six months, they say that PLR has been changed to 13%; so your rate is now 10% (13-3). But at the same time they will offer 9% to new customers (margin of 4%). I know many ICICI home loan customers and I had got the same feedback - interest rate increases at least by 0.5% within the first 6 months.
They have a clause that if you transfer loan to a different financial institution, there is a penalty of 2%. So once you become a customer, there is no way you can escape the interest rate hike as its totally left to their mercy. All the advantage that you think of (0.25% interest rate less than the PSU banks, 1000Rs processing fee - which is actually the trap) before taking the loan will go off within no time you become the customer.
DON’T THINK OF SAVING Rs.1000 OR Rs.2000/- IN PROCESSING FEE AND 0.25% OF INTEREST (The difference in EMI per Lac for 10.5% & 10.25% is only around Rs.17/- for a 20yr loan - but a change in 2-3% which is a hidden promise by ICICI, can impact the tenure by more than 260 months. i.e. for a loan of 1 Lac for 20yrs with 9% has emi of 900. for a loan of 1lac for 40yrs with 11% is 928.).
SO, PLEASE, NEVER EVER TAKE AN ICICI HOME LOAN. Consider Fixed option from any bank or floating rate from good banks - any PSU like SBI, Canara bank, or private bank like HDFC, etc. Couple of those to be avoided (no bad experience - just second hand info) are StanChart & Citi.
All the best.