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Mortgage financier LIC Housing Finance (LIC HFL) on Friday increased interest rate on home loans by 20 basis points to 6.9%, from 6.7%, for select borrowers, according to news agency PTI report.

The LIC Housing Finance in its statement said that the for borrowers with CIBIL score of 700 and above, the rate hike has been limited to only 20 bps. It is important to note that the revised rates are applicable from Friday.

For customers having CIBIL score (less than 700) maximum hike is 25 basis points (bps). For NTC (New to Credit) customers the hike is 40 bps, as per the company statement.

What is CIBIL score?

CIBIL Score is a 3-digit numeric summary of a customer's credit history. It ranges between 300 to 900. The closer the score is to 900, the better the credit rating is. The increase in the lending rate follows a hike of 40 basis points in the repo rate to 4.40% by the Reserve Bank of India last week.

Meanwhile, the LIC HFL's Managing Director and CEO Y Viswanatha Gowd said, "RBI has after a long time increased the policy rates and the effect is being seen across the lenders. We have kept our home loan rates competitive despite the increase in the cost of funds to support the aspirations of home buyers."

This development comes following several banks including HDFC Bank, Canara Bank, Bank of Maharashtra and Karur Vysya Bank revising their lending rates based on marginal cost of funds and repo rate.

(With inputs from agencies)

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