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Introduction

ICICI Bank offers a number of loan products to its customers. Customers can utilize ICICI Bank’s superior customer service and hassle free loan process to meet their financial needs. The bank offers various loans like Insta loans, personal loans, home loans, car loans, education loans, gold loans, and many more.

ICICI Bank loans come with attractive interest rates, repayment tenures and convenient repayment terms and conditions. In this guide, you can find all that you need to know regarding ICICI Bank loan repayments - how it works, terms and conditions and much more.

What is a loan?

A loan is a form of borrowing by people, companies, etc. from one or more entities, organisations or other institutions. The recipient incurs a debt and is usually obliged to pay interest on the loan until it is settled and to return the principal amount borrowed. Loans are of various sorts, such as housing loans, car loans, personal loans, student loans, corporate loans, and many others.

A loan is a form of liability owed by an individual or another entity. The lender — usually a corporation, financial institution, or government — provides the borrower with a sum of money. In exchange, the borrower refers to a list of provisions covering all financial charges, interest, maturity dates and other terms and conditions. In such cases, the lender can also need equity to secure the debt and guarantee its repayment.

What is loan repayment?

Loan repayment is how the borrower pays the borrowed money back to the lender. The balance of the loan is repaid in equal monthly instalments called the EMI, which consists of the interest part and the principal part.

The sum of the EMI, along with the interest and principal break-up, is given in a chart called the Amortization Schedule. This table shows the exact amount of interest and principal that is deducted from your loan amount for each EMI you spend.

The Amortization Schedule is a table displaying each instalment that is due, usually on a monthly basis, and the value of the instalment is assigned to the interest adjusted against the principal amount. Amortization table will help the borrower to track what they owe and when the next payment is due, as well as to figure out the overall remaining principal or interest on the loan.

Classification of Loans

Loans come in a number of different forms. There are a variety of aspects that can determine between the costs involved with them and their contract terms.

Secured vs. Unsecured Loan

Loans can be secured or unsecured. Mortgage and auto loans are secured loans, often backed or secured by collateral. In such situations, the equity is the asset on which the debt is taken out, so the mortgage collateral is the home, while the vehicle backs a car loan. Borrowers will be needed to provide additional sources of collateral on other types of secured loans, if applicable.

Credit cards and personal loans are unsecured loans. This indicates that they are not protected by any collateral. Unsecured loans typically have higher interest rates than secured loans, since the default risk is higher than secured loans. That's how the lender of the secured loan will recover the collateral if the borrower defaults. Rates tend to differ considerably on unsecured loans, depending on several factors.

Revolving Credit Vs Term Loan

Loans can also be defined as revolving or term. A revolving loan can be disbursed, utilized, repaid and utilised again, whereas a term loan applies to a loan paid in equivalent monthly instalments for a specified duration. A credit card is an unsecured, revolving loan, while a home loan is a secured, revolving loan. A car loan, on the other hand, is a secured, term loan, and a personal loan is an unsecured, term loan.

Most Common Types of Loan Repayments

Loan repayments are usually rendered by monthly EMIs. Occasionally, there is also a possibility of a Bullet Repayment. Repayment plans are primarily dependent on the type of debt, the amount of the loan, the interest rate, the preferred term and the ability of the borrower to repay. Let 's look at the two most common forms of repayments available for various types of loans;

EMIs – EMIs or Equated Monthly Instalments are the most common form of payment plans offered for any form of loan. In this form of repayment, the principal value of the debt plus the total interest is split into equivalent monthly payments for the term of the loan. This sum is called the EMI and is payable per month by the creditor on a set date. As the number of EMIs continues to be paid, the interest rate and the principal amount will be reduced accordingly from the amount of the debt until the full amount of the loan is repaid. The loan is then officially ended.

With EMI repayments, consumers are better able to handle their monthly finances. They're also expected to prepare for other costs accordingly. Banks also offer 'Part prepayments' and 'Full pre-closures' on your loans, which allow you to use the bulk of the sum you may receive during the loan repayment period.

Bullet Repayment- Some loan products will help you to repay the loan via a bullet loan repayment mechanism. You just need to pay the interest portion each month in this option. When the term of this loan expires, you have to repay the whole principal loan in one go.

ICICI Bank Loan Repayments

ICICI Bank Home Loan Repayments

  • ICICI Bank offers loans of up to 80% of the property value.
  • Repayment tenures of up to 30 years.
  • ICICI Bank offers the following modes of Home Loan repayments – post-dated cheques (“PDC method”) / the Electronic Clearing System (ECS) / direct debit from the Borrower’s bank account held with ICICI Bank (“Direct Debit method”) / by deduction from the Borrower’s salary account (“Salary Debit method”) / by directly paying amounts when due to the Lender (“Direct Payment method”).
  • The method of repayment is chosen at the time of loan disbursement.
  • This method can be changed at a later date by submitting the relevant forms to the bank branch.
  • NIL prepayment charges for home loans with floating rate of interest.
  • Make part prepayments on your home loans through NEFT option. The minimum part prepayment amount should be equal or more than one EMI.
  • Opt to increase the EMI amount based on your financial standing, so that you can close the loan earlier.

ICICI Bank Personal Loan Repayments

  • Get Personal Loans of up to Rs.20 lakhs to meet all your needs.
  • Get repayment tenures of up to 60 months to comfortably repay the loan
  • The loan shall be repaid in monthly instalments called EMI.
  • ICICI Bank offers the following modes of Personal Loan repayments – post-dated cheques (“PDC method”) / the Electronic Clearing System (ECS) / direct debit from the Borrower’s bank account held with ICICI Bank (“Direct Debit method”) / by deduction from the Borrower’s salary account (“Salary Debit method”) / by directly paying amounts when due to the Lender (“Direct Payment method”).
  • The method of repayment is chosen at the time of loan disbursement.
  • This method can be changed at a later date by submitting the relevant forms to the bank branch.
  • Prepayment of the loan is allowed at a nominal charge of 5% + GST. 
  • Prepayment is allowed only after the payment of 12 instalments.
  • Part prepayment of personal loans is not allowed.
  • Pre-closure is to be done at the branch by submitting relevant documents.

ICICI Bank Car/Two Wheeler Loans Repayments

  • Get ICICI Bank Car Loans up to 100% of on-road price of the vehicle.
  • Get attractive interest rates with repayment tenures of up to 7 years.
  • Get car loans for both new and used cars.
  • ICICI Bank offers the following modes of Car Loan repayments – post-dated cheques (“PDC method”) / the Electronic Clearing System (ECS) / direct debit from the Borrower’s bank account held with ICICI Bank (“Direct Debit method”) / by deduction from the Borrower’s salary account (“Salary Debit method”) / by directly paying amounts when due to the Lender (“Direct Payment method”).
  • The method of repayment is chosen at the time of loan disbursement.
  • This method can be changed at a later date by submitting the relevant forms to the bank branch.
  • Prepayment of the loan is allowed at a nominal charge of 5% + GST. 
  • Payments can be made via cash, cheque or demand draft.

ICICI Bank Gold Loan Repayments

  • Get an instant loan on your gold jewellery.
  • Attractive interest rates with simple documentation.
  • Get repayment option at the end of loan tenure.
  • You can repay the loan by Cash, Cheque, DD or through Funds Transfer.
  • Part payment of the loan amount is allowed. However, the jewels shall be returned only upon realisation of the entire loan amount.
  • The loan can be prepaid or fore-closed.

ICICI Bank Education Loan Repayments

  • Get loans of up to Rs.1 crore for your higher education needs.
  • Flexible repayment and tenure options to match your needs.
  • ICICI Bank offers the following modes of Car Loan repayments – post-dated cheques (“PDC method”) / the Electronic Clearing System (ECS) / direct debit from the Borrower’s bank account held with ICICI Bank (“Direct Debit method”) / by deduction from the Borrower’s salary account (“Salary Debit method”) / by directly paying amounts when due to the Lender (“Direct Payment method”).
  • The method of repayment is chosen at the time of loan disbursement.
  • This method can be changed at a later date by submitting the relevant forms to the bank branch.
  • The loan can be pre-closed at any time during the tenure.
  • There are no charges for prepayment.
  • Repayment tenure of the loan can be extended if the course period is increased by the university.

How to use the ICICI Bank EMI calculator?

ICICI Bank EMI calculators help you to calculate the monthly EMIs based on your loan amount, repayment tenure and the rate of interest. EMI calculators ensure that you can afford the loan repayments comfortably. Most EMI calculators have 3 major components; the loan amount, the repayment tenure, and the rate of interest.

You can enter variable values in these three fields, and the screen will display the corresponding EMI amount (monthly), the total interest repayable and the total amount payable.

CreditMantri Repayment Calculator

The CreditMantri website has EMI calculators for different types of loans. You can find them through this path – Home > Community > Finance Calculators.

Once you have chosen the desired calculator, you can enter different values in the loan amount, loan tenure and Rate of Interest fields to calculate the respective EMI amount (monthly), total interest payable and the total repayment amount.

This will give you a clear idea if you can afford the loan. If needed, you can pool in additional down payment or submit additional security or collateral to get better loan terms.

FAQs

1. What should I do after paying the last EMI?

Once all the EMIs have been paid, the Bank shall issue a letter of closure, Form 35 and No Objection Certificates and the original documents that you had submitted at the time of loan application. A similar NOC shall also be given to the insurance provider to delete the relation from the contract, if necessary, within 6 days from the date of payment of the last EMI. Please notice that Form 35 is valid for a term of three months from the date of issue. Any security post-dated checks (PDCs) issued during processing will also be returned.

2. What is the most common form of loan repayment in India?

In India, most loan products offer the ‘EMI repayment’ method. This EMI amount is generally auto-debited from your bank account with the same bank or different bank. These days, a NACH mandate facilitates the auto deduction of the EMI amount from your bank account.

3. What happens if my ECS / NACH / cheque is rejected / returned or if I don't pay EMIs on time?

Dishonouring a check / ECS / NACH is a criminal offence which can be subject to fines under the applicable provisions of the legislation. You may be listed as a defaulter for not paying the EMIs on time. You will have to pay a penalty initially. If, despite repeated reminders, you refuse to regularise your payments, the Bank can legally reclaim your vehicle or property. In comparison, your credit ratings would also be negatively impacted, which will hinder the chances of obtaining a loan in the future. In addition, you will still have to pay a bounce fee on the return of the instrument. Please refer to our Schedule of Charges for the sum of this fee.

4. Is part- prepayment of a personal loan allowed?

The prepayment part is not permitted. The personal loan must either be prepaid in full or serviced for the term of the deal.

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