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MONDAY, NOVEMBER 23, 2009

Mumbai: On the heels of public sector banks slashing home loan rates, LIC Housing Finance has announced a 1.75-2.25 percentage point cut in lending rates for home loans up to Rs20 lakh from 17 December.

“We have reduced our lending rates with effect from 17 December. For a five-year term, our lending rate for loans up to Rs20 lakh is 9.25% and for those beyond five years, the rate will be 9.75%,” LIC Housing Finance Director and Chief Executive R.R. Nair told PTI.

For loans above Rs20 lakh, the rate has been reduced from 11.5% to 11.25%, Nair said.

Public sector banks recently cut their lending rates on home loans up to Rs5 lakh to 8.5% and loans of Rs5-20 lakh to 9.25% for the first five years, after which the lending rates will be reset.

The scheme, which is applicable for loans taken till June 30, also offers free life insurance cover and exemption from pre-payment penalties to borrowers in these categories.

LIC Housing Finance is offering floating rates for home loans. Within six months it will be linked to prime lending rates (PLR) minus 3 percentage points, or 2.5%, depending upon the customer profile, Nair said.

The rates will be reviewed on 1 April or 1 July next, he said.

“Though the government has directed public sector banks to give a five-year fixed rate, we cannot give fixed rates for five years because of possible uncertainties in market trends,” Nair said.

The Reserve Bank recently announced a Rs 4,000-crore refinancing facility for National Housing Bank and this has helped LICHF to lower its home loan rates, Nair said.

“We could think of reducing our rates because of the National Housing Bank (NHB) window of Rs4,000-crore for housing finance companies,” he said.

LICHF expects to receive a “good share” of the corpus very soon, facilitating the company to lend more to small home loan borrowers, Nair said.

“We are expecting that a good share of that corpus would come to us at a lesser cost of around 8%,” he said.

After the central bank eased the tight liquidity situation by infusing over Rs3-lakh-crore liquidity into the banking system, many banks had reduced their housing loan rates in the recent past.

This included the country’s largest home loan lender Housing Finance Development Corporation and leading private-sector lender Bank of Rajasthan in the range of 0.5-1.5%.

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Hira Said:


Dear sir Iwould like to know about LIC loan. I have taken loan from Ludhiana (Pb)Rs. 13,50,000/- which i got fist installment in Sept. 2008 Rs. 10,000,00/- that time interest rate 11.75%. Are you reducing rate of interest under floating scheme. I hav balance loan amount Rs. 3,50,000/-. i will wait ur kind response. thanking Hira Lal A/c No. 050406377

Posted On 12/27/2008 9:41:16 AM
Bibhuti Said:


For loans above Rs20 lakh, the rate has been reduced from 11.5% to 11.25%, Nair said. Is the above also going to effect the existing loan or only for the new Loan? Mine currently is on floating rate of 11.75%

Posted On 12/29/2008 5:47:45 PM
rajat Said:


Dont take loan from LIC they are very inefficient and very rude the reduction is only for new customers existing customers are still paying 11.75% aviod lic and avoid headache

Posted On 1/2/2009 5:35:21 PM
sundar Said:


If what Rajit says is true ( that LIC has not reduced the intrerest rate fro the existing ones that they are still paying high interest despite interest rate slashed by other credit organization LIC MUST GIVE A TRUE REASON WHY IT IS SO OR ELSE LIC WILL LOSE ITS CREDIBILITY AND THE CUSTOMERS. BEING VESTED WITH RIGHT TO INFORMATION WE NEED TO KNOW THE FACTS SUNDAR

Posted On 1/15/2009 5:36:26 PM
Vasudevarao Said:


LIC HFL does not bother about existing customers. It is paying 50% dividend. It is charging heavy interest from existing customers and paying it to share holders. Looting common man and paying dividends to rich people. It is getting cheap money from government and not passing the benefit to the customers.

Posted On 1/20/2009 8:20:36 AM
Balu Said:


Never take Housing loan from LIC HF. LIC HF is not flexible in reducing interest rate. They are concentrating only on their every Quarter profit by increasing interest rates. I am the only fool in my office took LICHF loan. All other my colleagues have gone to Nationalized Bank, and paying less interest. Please be aware and better to switch over to Nationalized Banks which at least consider RBI Guidelines and respect the customers.

Posted On 1/27/2009 8:34:11 PM
Re: Sanjay Said:


Don't go for LIC HFL . Even for new customer they are offering 9.75 , which is valid only for six month after six months it will linked to their PLR ( PSU bank's offer is 9.25 for 5 year ) .

Posted On 2/10/2009 10:31:57 PM
Sunil Said:


Its big Mistake that i've chosen LIC for home loan... can anyone imagine how much EMI i am giving for the loan of 6lakh. its 22 thousand per Month. and when i am requesting LIC to reduce my EMI ..they are not ready to listen. they are making hundred of excuses. LIC more like a private sector bank. i will suggest never take a loan from LIC. if you ever been in touch with LIC agent name DABLOO(From Noida) . just ignore him, he is totally a fraud.he is totally a Illiterate person and doesnt have a single knowledge on Home loan.

Posted On 2/17/2009 10:35:49 AM
Re: JP Said:


Yes I agree to all negative points on LICHFL. Mine is still 11% and not reduced further. I am planning to switch to SBI

Posted On 3/4/2009 4:38:58 PM
Prasad Said:


I completely agree to all the posted comments. Nationalised banks, the ROI is hovering at 8-8.5% and we are paying 11%. Is there any APEX body where these kind of issues can be submitted ? What is the process to transfer a loan to a nationalised bank ?

Posted On 3/25/2009 2:57:16 PM