The battle for home and car loans is getting hotter. ICICI Bank has taken on HDFC and State Bank of India (SBI), cutting rates by 50 to 75 basis points.
It has reduced rates on home loans by 50 basis points, launching a new home loan scheme that charges 8.25 per cent for the first year and 9 per cent for the second. From the third year, the bank will charge the then prevailing floating rate.
The bank’s car loans are also 75 basis points cheaper at 9.5 per cent fixed for three years. If the car has a good resale value, the rate of interest will be even lower at 9.3 per cent.
The new car and home loan schemes are available till the end of April, after which the rates will be reviewed. The schemes are open to ICICI Bank’s salary account and savings account holders. The special rates are being offered to other customers on request.
ICICI Bank did not respond to queries on the bank’s new home and car loan schemes.
Last week HDFC introduced a similar product at reduced rate of interest with a fixed and floating component. HDFC said it was introducing the special home loan scheme due to a fall in the cost of funds and success of its earlier special package. The ICICI Bank rates match those of HDFC special home loan scheme.
For car loans, ICICI Bank also has tie-up with a host of dealers and manufacturers, which enables them to offer competitive rates.
Under its regular home loan scheme, ICICI Bank offers floating rate of 8.75 per cent for loans up to Rs 30 lakh, 9 per cent for loans between Rs 30 lakh and Rs 50 lakh and 9.25 per cent for loans above Rs 50 lakh, which is similar to the HDFC scheme.
The reduction in rates by private players came after SBI decided to launch a revised version of its special home loan scheme up to April 30. Under SBI’s new home loan scheme that is open till April 30, the bank charges 8 per cent for the first year and 8.5 per cent for next two years. For loans over Rs 30 lakh, SBI offers 8 per cent for the first year and then 9 per cent fixed for the next two years.
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