What are the main steps in the disbursement process?
The main steps involved in the disbursement process are as follows:
- Once you have identified the property that you want to buy, you may get in touch with the officer mentioned in the sanction letter to under the disbursement process.
- Based on the nature of the transaction (purchase from builder / resale etc.), the officer will inform you of the property documents such as Sale deed, No Objection Certificate, Own Contribution Receipt, etc. which would be required for the disbursement of the loan.
- In addition to the property documents, you will be required to execute transaction documents including the Credit Facility Application Form and other documents required for disbursement of the facility. These documents will be provided to you by ICICI.
- Also, any other special condition mentioned in your sanction letter before any disbursement can be made needs to be fulfilled.
Note : We recommend you retain photocopies of all documents being submitted by you for your future reference. In case you require your documents during the loan tenure the retrieval period is 6 days at a nominal charge.
How do I repay the loan?
You are required to repay the loan by way of Equated Monthly Installments ("EMIs") compromising of principal and interest. EMIs commence from the month following the month in which the loan has been disbursed to you in full, i.e. the last tranche of the loan has been disbursed to you.
The EMI is payable on 1st or 10th of every month depending on the date selected by you.
For example, if the loan is disbursed in full to you in April 2008, the EMI will start from May 2008.
It is necessary for you to ensure timely EMI payment. The repayment history is monitored by Credit Information Bureau Of India Limited (CIBIL) as a regulatory requirement. Irregular repayment history would impact your future loan requirements.
How are EMIs calculated?
EMIs are calculated on monthly reducing balance. This means that you are charged interest only on the outstanding Principal every month. Moreover you can get in touch with your officer, who will apprise you on the same.
For example, if you have taken a loan of Rs.10,00,000/- for 20 years @12% and after the first month you have paid an EMI of Rs.11,011/-, then Rs.1,011/- of the Rs.11,011/- goes towards paying the principal and Rs.10,000/- goes towards payment the interest.
During the second month, your outstanding principal is Rs.9,98,989/- so for the second month, you will be charged interest on this amount, and not on Rs.10,00,000/-.
Therefore the second month, only Rs.9990/- will go towards paying interest. The rest of the EMI (Rs.1,021/-) will go towards reducing your principal. This calculation will be done each month.
What is Broken Period Interest?
If you take disbursement during the month you would be charged simple interest from the date of disbursement upto the start date of the EMI. For example: If you take a disbursement on the 15th of September and your start date of EMI is 10th October then you would pay interest as per the below calculation:
1000000x12/100x24/365=Rs.7890.04 (15 days of September and 9 days of October). This period of 24 days is often referred to as the broken period.
However if you opt for an EMI start date of 1st October then you would pay interest only for the period from 15th September to 30th September as calculated above.
It is also to be noted that the EMI payment is made in arrears, For example; For an EMI start date of 10th October, the payment would start from 10th November.
What is Pre-EMI and how is it calculated?
Pre-EMI is applicable when the loan amount is partly disbursed. Pre-EMI is a simple interest on the loan amount disbursed, completed at the applicable rate of interest and is payable on the last date of every month.
Pre-EMI is calculated using the following formula:
Amount disbursed till date x applicable rate of interest x No. of days remaining in the month/ 365.
For example; Loan amount of Rs.1,00,000/- has been disbursed to the customer on 1st August, 2008 at the rate of interest of 12%. Then Pre-EMI payable for the month of August would be: 100000x12/100x30/365=Rs.987/-.
How do I pay my EMI & Pre-EMI?
- By issuing a Electronic Clearing System ("ECS") mandate; or
- By issuing a Director Debit Mandate (for ICICI Bank Account holders only); or
- By means of Post Dated Cheques (PDCs)
What is an amortization schedule?
An amortization schedule is a table giving the reducing outstanding amount of your loan by payment of monthly installments.
The amortization schedule gives the breakup of each EMI towards repayment of interest and principal of your loan amount. The amortization schedule is given to you at the time of sanction of the loan. You can also obtain the amortization schedule at any point of time during the currency of the loan from any ICICI customer service centres.
What if the EMI cheque bounces?
In case of cheque bounce, you will be required to pay additional interest and other applicable charges.
How do I replenish the exhausted PDCs?
You can approach any of the ICICI customer service centres and submit a fresh set of PDCs. You should ensure that the cheques are dated as per your existing EMI cycle. For details on ICICI branch addresses please call the numbers mentioned at the end of the brochure.
How can I make a part pre-payment of my loan?
Change of Tenor
By default, after any part-prepayment is made, the tenor of the loan gets reduced and the EMI is kept constant.
Change of EMI
You have the option to reduce your EMI and keep the tenor constant.
How long does the whole process of part pre-payment take?
The part pre-payment usually should take 5 days, and if a change in EMI is requested for, then it should ideally take 9 days.
When is the Income Tax ("IT") certificate issued?
A provisional IT certificate is sent to the customer at the beginning of every financial year. Thereafter, a final IT certificate is sent at the end of each financial year. You can expect to receive the provisional IT certificate for the current year and final IT Certificate for the previous year in the month of April or May.
Can I get the IT certificate in the name of both applicant and co-applicant separately?
As per the Income Tax Act, section 24(b) & section 80C(2) (xviii) only one certificate can be issued for a home loan and hence only one certificate will be issued in the name of both applicant and co-applicant.
How can I foreclose my loan?
You can foreclose your loan by approaching any of the ICICI customer service centres. The Customer Account Manager will give you the statement mentioning the amount to be paid for foreclosure of loan. Thereafter, you would be required to issue a cheque for the outstanding amount of the loan, foreclosure charges and other applicable dues outstanding in your account.
What are the charges on foreclosures?
The charges applicable upon foreclosure shall be as per the rates specified in your application form and other transaction documents.