LIC Housing Finance Ltd. Home Loan Review

LIC Housing Finance Ltd. Home Loan Review

LIC Housing Finance Ltd. is offering home loan products with all-time low interest rates.

Good for

  • Pensioners and older borrowers who want to enjoy more home loan benefits

Bad for

  • NRIs and self-employed individuals who are seeking a longer loan tenure

Editor's Rating

4.0/5.0

LIC Housing Finance Limited (LIC HFL) is one the most popular and trusted non-bank home loan lenders thanks to its low, competitive interest rates. Generally, non-bank home loan lenders charge higher interest rates than banks, but you will find some of the lowest rates at LIC HFL. Pensioners and salaried borrowers will enjoy more home loan benefits than self-employed individuals. Likewise, NRIs will find that there are more home loan eligibility restrictions if they plan on taking an LIC housing loan.

Summary of LIC Home Loans
Interest rates at an all time low, starting at 6.90% p.a.
Benefits salaried individuals and pensioners
More restrictions for NRIs and self-employed individuals
Information is hard to find online, so LIC is better for in person transactions

Table of Contents

What Makes LIC Home Loans Stand Out to Borrowers

LIC Housing Finance has serviced over 10 lakh applicants, providing lenient eligibility criteria and minimal documentation requirements to its borrowers. Now, LIC home loan interest rates are at an all time low, starting at 6.90% p.a.

While resident Indians, non-resident Indians (NRIs), and pensioners, alike, are eligible for an LIC home loan, loan details differ by category. Below, you will find a list of LIC home loans and how their loan tenure and loan-to-value ratio (LTV) compare against each other.

Borrower TypeHome Loan TypeLTV RangeMaximum Loan Tenure
Resident IndianPurchase75% - 90%30 years for Salaried, 20 years for Self-Employed
Construction75% - 90%30 years for Salaried, 20 years for Self-Employed
Extension75% - 90%30 years for Salaried, 20 years for Self-Employed
Repairs/ Renovation75% - 90%30 years for Salaried, 20 years for Self-Employed
Plot Purchase75%15 years
Take Over/ Top Up30 years for Salaried, 20 years for Self-Employed
NRIPurchase75% - 90%20 years for Salaried, 15 years for Self-Employed
Construction75% - 90%20 years for Salaried, 15 years for Self-Employed
Extension75% - 90%20 years for Salaried, 15 years for Self-Employed
Repairs/ Renovation75% - 90%20 years for Salaried, 15 years for Self-Employed
Plot Purchase75%20 years for Salaried, 15 years for Self-Employed
PensionerBefore Retirement70%15 years
After Retirement70%Check with LIC office.

Salaried individuals benefit from longer home loan tenures, which results in smaller equated monthly instalments (EMIs) over time. If you are salaried and a resident Indian, you can apply for an LIC home loan with a maximum 30 year tenure. Salaried NRIs, on the other hand, are eligible for a maximum home loan tenure of 20 years. Regardless of your resident status, if you are seeking to apply for an LIC plot purchase loan, your maximum tenure will be 15 years.

If you are non-salaried or self-employed, you will find that your maximum home loan tenure is 20 years. For self-employed NRI borrowers, you are eligible for only a 15 year loan term. LIC home loan tenures for NRIs are shorter than most other lenders, so this is good to keep in mind if you aren't a resident Indian.

If you are near retirement or already retired, you are eligible for LIC home loans, as well. LIC Housing Finance is generous towards pensioners, covering 70% of your property value. The other 30% is expected to come out of your retirement fund. Additionally, pensioners can avail a home loan with a 15 year maximum tenure.

LIC Home Loan Interest Rates

LIC HFL offers low, competitive interest rates based on job position, CIBIL credit score and the loan amount you wish to avail. Relative to other non-bank home loan lenders, LIC charges very low interest rates on home loans, with rates comparable to top banks like HDFC, SBI and ICICI Bank.

Read more: HDFC Home Loan | SBI Home Loan | ICICI Home Loan

Click below to see the floating interest rates of different LIC home loan schemes.

Below, we've listed interest rates for both salaried and non-salaried LIC borrowers, as well as the average interest rate of over 30 home loan lenders in India for comparison.

Loan AmountSalariedNon-Salaried
Up to 50 lakhs, with Cibil score < 07.40% - 7.50%7.40% - 7.50%
Up to 50 lakhs6.90% - 7.50%7.00% - 7.60%
50 lakhs - 1 Crore7.00% - 7.70%7.10% - 7.80%
1 Crore - 3 Crore7.10% - 7.70%7.20% - 7.80%
3 Crore - 15 Crore7.20% - 7.80%7.30% - 7.90%
Average Rate in India7.54% to 8.41%7.60% to 8.53%

Below, we've listed floating interest rates for both salaried and non-salaried LIC borrowers, as well as the average interest rate of over 30 home loan lenders in India for comparison.

Loan AmountSalariedNon-Salaried
Up to 50 lakhs with Cibil score < 07.65%7.75%
10 lakhs - 50 lakhs7.15% - 7.75%7.25% - 7.85%
50 lakhs - 1 Crore7.25% - 7.95%7.35% - 8.05%
1 Crore - 3 Crore7.35% - 7.95%7.45% - 8.05%
Average Rate in India7.54% to 8.41%7.60% to 8.53%

Below, we've listed LIC home loans with fixed interest rates, as well as the New Face Lift loan scheme.

Loan AmountInterest Rates
Up to 50 lakhs10.05% Fixed Rate
50 lakhs - 1 Crore10.15% Fixed Rate
Up to 15 Crore7.75% - 8.10%

Borrowers with a CIBIL score of 700+ can enjoy the lowest interest rates, but even if you have a low CIBIL credit score, you can still avail a home loan with a lower interest rate relative to the market. If you are a current borrower, you can benefit from these new, low interest rates, as well.

Read more: 2020 Home Loan Interest Rates of All Banks

LIC Home Loan Eligibility Criteria

Consider this if you seek the lowest home loan interest rates

Maximum Loan Tenure 30 years
Processing Fee Loan up to Rs. 50 lakhs: Rs. 10,000 + GST. Loan more than Rs. 50 lakhs: Rs. 15,000 + GST

LIC Home Loan Eligibility Criteria is hard to find on the LIC HFL website. But what we do know is that pensioners are eligible for home loans with a generous minimum and maximum age limit. For borrowers over 50 years old and up to 70 year olds, you can avail a home loan with a maximum tenure of 15 years.

Recently, LIC promoted a new loan scheme for eligible pensioners which allows a maximum applicant age of 80. The Griha Varistha home loan offers low interest rates and EMIs for older borrowers of the minimum age of 65, and allows up to a 30 year loan term if applying with a younger co-applicant.

Read more: Home Loan Eligibility: Compare Eligibility Criteria by Bank

LIC Home Loan Processing Fee and Other Charges

LIC home loans come with standard processing fees and other charges. Below, you will find a list of different fees you may come across when availing an LIC housing loan.

ChargesAmount
Home Loan Processing Fees
  • Loan up to Rs. 50 Lakhs: Rs. 10,000 + Tax
  • Loans of Rs. 50 lakhs - Rs. 3 Crores: Rs. 15,000 + Tax
New Face LiftRs. 1500 + GST
Mortgage Loans1.00% of loan amount or Rs. 25,000 + Tax
Statutory Charges (CERSAI)
  • Loans up to Rs. 5 lakhs: Rs. 250 + GST
  • Loans above Rs. 5 lakhs: Rs. 500 + GST
Rewriting Charges
  • Loans up to Rs. 75 lakhs: Rs. 1000 + GST
  • Loans above Rs. 75 lakhs: Rs. 2500 + GST
Cheque Bouncing ChargesRs. 350
ECS Dishonour ChargesRs. 200
Document Retrieval ChargesRs. 2500 + Tax
Providing List of DocumentsRs. 500 + Tax
Photocopies of Title DocumentsRs. 1000 + Tax
Late EMI Payment Charges
  • Up to 12 months default: 1.50% p.m.
  • After 12 months: 2.00% p.m.

Like most home loan lenders, LIC HFL charges no prepayment charges for home loans with floating interest rates, and 2.00% of the loan amount for home loans with fixed interest rates.

For late EMI payments, many banks charge 2.00% per month (24% p.a.) of your total loan amount. At LIC Housing Finance, you only have to pay 1.50% per month if you are defaulting on EMI payments up to 12 months. After 12 months, you are expected to pay 2.00% as a late fee.

How to Apply for LIC Home Loan: Application Process

While you can begin your LIC home loan application process online, it is best to go to a nearby branch or call customer service for a step-by-step walk through.

After submitting your application alongside your Know Your Customer (KYC) documents, CIBIL credit report and other verification documents, an LIC official will sanction your home loan amount. Your property documents will then have to be evaluated and cleared by LIC Housing Finance.

Here, you can see which required documents for proof of identity and income are necessary for your home loan sanction.

Required Documents for All BorrowersSalaried BorrowersSelf-Employed Borrowers
  • Application form duly filled in.
  • Identity Proof such as PAN Card, Voter’s ID Card or Passport.
  • Address Proof such as Ration Card, Electricity Bill, Telephone Bill, etc.
  • Bank Pass-book or statements for the last 2 years.
  • Power of Attorney, wherever applicable.
  • Salary slips for last 6 months.
  • Form 16.
  • 3 years income tax returns/assessment orders along with computation of income and statements of accounts certified by C.A.
  • 3 years financials – Profit and Loss account, Balance Sheet, Audit Reports, etc.

Once LIC approves your loan sanction and property valuation, they will go ahead with the collection and stamping of required property documents, and disburse your loan amount within time.


Natalia Sanchez-Kumar

Natalia Sanchez-Kumar is a Junior Research Analyst at ValueChampion, specialising in home loans in India. She is a History graduate of New York University and has worked in the area of social impact, Future of Work and socio-technological research in the US and India. She has co-authored policy proposals alongside the International Labour Organisation in Sri Lanka and the Maldives, as well as hosted a data privacy conference with Facebook in New Delhi.