ICICI Bank Personal Loan Review
ICICI bank offers personal loans upto an amount of Rs.15 lakhs. No security/ guarantor is required for this loan and it can be repaid over a period of between 12 months and 60 months. They claim that 'minimum documentation' is required. You can also get an ICICI Bank Personal Loan on the repayment track of your existing Home loan, Car loan or Personal loan; or your Credit Card statement. If you're an ICICI bank customer, you can get a loan without having to visit your local branch. If you've been an ICICI customer for atleast six months, you may have been 'pre-approved' for a loan, according to ICICI.
Read:
Case against ICICI for death of personal loan customer - June 2007
Customer assaulted by ICICI Bank guard - Feb 2006
ICICI bank loan allegedly caused customer to commit suicide - July 2006
Eligibility for the ICICI personal loan
Salaried
The salaried and self-employed are both, eligible for this personal loan. If you're salaried, you need to be between 25 years and 58 years of age with a minimum net annual income of 96,000 per annum and employed with a public limited company, a private limited company, a multinational corporation (MNC) or with the government. You should have been employed for atleast one year and living in your current residence for atleast one year.
Self employed
If you're self employed, you need to be between 25 years and 65 years of age with a minimum net profit after tax of Rs.60,000 per annum. Doctors, MBA's, Architects, CA's, Engineers, Traders & Manufacturers are eligible. You need to have been in your profession for atleast three years and living at your current residence for atleast one year.
Documentation required
Salaried
- Latest 3 months Bank Statement (where salary/income is credited)
- 3 Latest salary slips
- Proof of Continuity current job (Form 16 / Company appointment letter )
- Proof of Identity (any one)Passport / Driving Licence / Voters ID / PAN card / Photo Credit Card / Employee ID card
- Proof of Residence (any one) Ration Card / Utility bill / LIC Policy Receipt
- Proof of Qualification Highest Degree (for Professionals / Govt employees
Self employed
- Latest 3 months Bank Statement (where salary/income is credited)
- Last 2 years ITR with computation of income / Certified Financials
- Proof of Turnover (Latest Sales / Service tax returns)
- Proof of Continuity of current profession (IT Returns / Certificate of business continuity issued by the bank)
- Proof of Identity (any one) Passport / Driving Licence / Voters ID / PAN card / Photo Credit Card / Employee ID card
- Proof of Residence (any one) Ration Card / Utility bill / LIC Policy Receipt Yes Yes
- Proof of Office (any one) Lease deed / Utility bill / Municipal Tax receipt / title deed Yes
- Proof of Qualification Highest Degree (for Professionals / Govt employees
Service charges for the ICICI personal loan
Loan Processing Charges
This is 2 % of the loan amount. So for a personal loan of Rs.50,000, you'll pay Rs.1,000. This can go as high as 5 % in select categories.
Origination Charges
This is 1 % of the loan amount. So on an amount of Rs.50,000 you'll pay Rs.500. This is to be paid along with the first repayment installment.
Cheque swap chargesIf you need to change the post-dated cheques issued to ICICI bank, towards repayment of the personal loan, ICICI will charge you Rs.500.
Cheque bounce charges
When a cheque issued by you to ICICI, bounces, you pay a penalty of Rs.200.
Charges for late payment
If you're late in paying the installment due on the ICICI personal loans, you'll be charged 2 % per month as charges for late payment.
Interest rate can change
ICICI bank can, using its discretion change the interest rate on the personal loan according to their terms and conditions. In fact they cna change virtually anything they want in the terms and conditions as you will find out by the time you finish reading this review.
Changing mode of repayment
If you wish to change the mode of repayment of the ICICI personal loan, this needs to be done with the permission of ICICI bank. Stopping payments on post-dated cheques or otherwise cancelling or revoking mandates would be considered 'committed with a criminal intent' according to the ICICI terms and conditions.
Default of ICICI personal loan
There are several situations in which a borrower can be considered as a defaulter. This includes , to quote ICICI's terms and conditions:
One or more events, conditions or circumstances (including any change in law) occur or exist, which in the sole opinion of ICICI Bank, could have a Material Adverse Effect.
The scope of this clause is very wide. It means that if any event occurs which makes ICICI believe you may default, you would be considered as a defaulter.
If the borrower or any of the borrowers, in case there is more than one, dies he/they would be considered a defaulter.
In the event of default of personal loan
We keep reading about ICICI using third party agencies to recover money. This is a right you give them when you sign up for a personal loan with them. In the event of a default, ICICI bank shall, at the cost of the borrower, hire one or more persons to collect the borrowers dues and to quote them, ICICI Bank may (for such purposes) furnish to such person(s) such information, facts and figures pertaining to the Borrowers as ICICI Bank deems fit. ICICI Bank may also delegate to such person(s) the right and authority to perform and execute all acts, deeds, matters and things connected therewith, or incidental thereto, as ICICI Bank deems fit.
In other words, ICICI can send a person or a group of persons to your office or residence askling you to pay your loan.
ICICI also has the right to contact your employers and ask them to deduct the amount payable from your salary and remit the same to ICICI bank. The deductions may be of an amount which ICICI Bank decides. So if your salary is 15,000 a month and you've taken a loan of Rs.20,000, ICICI Bank can, hypothetically ask your employer to deduct Rs.15,000 from your salary and send it to ICICI, leaving you with nothing to run your home with. Whether they do this or not is entirely their choice. You give them the right to do this, when you take a personal loan from ICICI.
The Borrower/s shall not have, or raise/create, any objections to such deductions. No law or contract governing the Borrower/s and/or the Borrower/s’ employer prevents or restricts in any manner the aforesaid right of ICICI Bank to require such deduction and payment by the Borrower/s’ employer to ICICI Bank. In other words, you cannot object!
Their terms and conditions further state, Provided however that in the event the said amounts so deducted are insufficient to repay the outstanding Borrower/s’ Dues to ICICI Bank in full, the unpaid amounts remaining due to ICICI Bank shall be paid by the Borrower/s in such manner as ICICI Bank may in its sole discretion decide and the payment shall be made by the Borrower/s accordingly.So if your salary is 15,000 and ICICI has deducted the entire amount, now it has the right to decide when the rest of the amount is payable and in what mode. You're a defaulter, remember?
Your fixed deposits are in peril
Let's say you have a fixed deposit account with ICICI, which you opened to save for your daughter's wedding. Now you've taken a personal loan of Rs.20,000 to buy a scooter. If you're in default of even a single installment, ICICI has a right to deduct this amount from your fixed deposit account with them. They have a lien on all assets you have with them or their group companies. Since ICICI Direct share trading is also offered by ICICI, if you have shares lying in their demat account, as per their terms and conditions, they can have access to these shares.
Communication is a one-way street here
If ICICI sends a notice to your home or office address, it is assumed that you received it. If you send a letter to ICICI, unless it is received and acknowledged by ICICI bank, it is not considered effective.
Right to choose jurisdiction
If you go to court against ICICI, as per the terms and conditions, you can only approach a court in Mumbai. ICICI however reserves the right to file a suit against you anywhere in the country. We're not sure how far this clause itself would stand in court since it infringes on the right of an individual to legal recourse.
ICICI bank can publish names of defaulters in newspapers or show them on TV or publish them online.
In case the Borrower/s commits any default in payment or repayment of principal amount of the Facility or interest/charges due thereon, ICICI Bank and/or the Reserve Bank of India ("RBI") will have an unqualified right to disclose or publish the details of such default along with the name of the Borrower/s and/or its directors/partners/co-applicants, as applicable, as defaulters in such manner and through such media as ICICI Bank and/or RBI may, in their absolute discretion, think fit.
ICICI bank has the right to publish the name of a borrower who is in default, in any newspaper they choose or show it on television or publish it on the internet. This is again a right you give them when you take the personal loan. How would you like to open Times of India on a Sunday morning and find your name published in it as the defaulter of a personal loan? This clause also gives them the right to share you information with virtually anyone, if you're in default of repaying your personal loan.
Finally this clause takes the cake:
ICICI Bank has the absolute discretion to amend or supplement any of the Loan Terms at any time and will endeavour to give prior notice of fifteen days by email or put up on the website as the case may be for such changes wherever feasible and such amended terms and conditions will thereupon apply to and be binding on the Borrower. Further, the Loan Terms shall also be subject to the changes based on guidelines / directives issued by the RBI to banks from time to time.
In simple English this means that ICICI can change the conditions under which it gave you the loan by giving you just fifteen days notice by email or by just publishing the new terms and conditions on their website. All such new terms and conditions will apply to you, even though you opted for the loan much before the new terms and conditions were framed. If you don't like the new terms and conditions, you can prepay the loan, of course, but scroll up on this page and you'll see that you can't prepay for atleast six months after taking the loan. You can also not choose to prepay only part of the loan. If you want to prepay, you have to pay all of it back and when you do, there's a 5 % charge on the total amount.
After all this, if you want a personal loan, we recommend you try getting one from your friends, relatives, boss or business associates. If absolutely nothing else works, read this review once again and consider ICICI personal loan, as an informed customer, knowing what you're in for.
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Research on icici bank personal loan
Its great that you have made an exhasutive research on personal loan. but it is slightly a biased research which you have made.
Pre-payment charges : it is 5 % + service tax on the balance principal loan o/s. which is quite similiar to other banks. I am not comparing here with nationalised bank. its realistically too difficult to get a personal loan easily with nationalised bank.
Processing Fee : it ranges from 1 % - 3 % plus serv tax. there is no 5 %. that was for Micro banking loan which ICICI bank has stopped funding.
Swapping charges - if you want to swap A/c from one icici A/c to another icici a/c then there is no charges. rs 551 is charged only when you swap with a non-icici A/c.
Loan recovery agency assigned by bank visit customer's place in extreme case when a customer even after repeated reminder defaults on the payment.which is true for any other bank.
Its ultimately public money which the bank is providing as a loan.
Moreover, in extreme cases only customer's other asset relationsip are marked lien.
and yes,ICICI bank for a salaried person cannot instruct the employer the customer get the loan Emi deducted from the salary.I think your research is vague in this respect.
and please don't misguide people with the policy which you people don't know yourself.
Insist on requisite Loan Amount
Regarding the requested loan amount, I required only Rs. 75,000 but the agents asked me that I will have to take a loan of Rs. 1,50,000.
I ended up paying for this amount and while asking for a prepayment, they are now demanding penalty for the remaining amount (principal only, most of the interest is alrady paid in first six mths).
So I end up apying them more than 1,78,000.
More than Rs 1,00,000 than I had applied for...
INSIST ON THE AMOUNT YOU NEED, NOT WHAT THE AGENTS ARE OFFERRING YOU.
For you, it is a liability, for them, COMMISSION!!!
Dear friend
It is always advisable that when you are applying for a loan then do visit a branch.so that you don't get wrong information. Moreover. there is a pre-payment charge of 5.62 % on Principal o/s loan amt which you can close after 6 months.
pre-payment charges are there with every bank.
If there is no exit charge anyone can close the loan in 2 -3 months. please understand bank is also losing interest by your early closure of loan. when the bank is funding you ,it has planned a return at certain rate.obviously it is someone's fixed deposit on which bank is funding you.
your early closing the loan means bank again has to fund the money to someone else which required cost of acquisition.
for better understanding i recommend you visit your nearest icici bank branch and meet the loans manager.
thany you
thanks for the information which you hanve provided to me..
i was planning to take personal loan fro amt of Rs 75,000 on a 16% reducing rate frm ICICI bank.. i was not completely aware of the clauses behind this..
you are right i will rather ask from my friends..