LIC Home Loan Review: Interest Rates @ 6.90%

LIC Home Loan Review: Interest Rates @ 6.90%

LIC Housing Finance Ltd. provides home loan products at low interest rates, with special benefits for pensioners.

Good for

  • Low interest rates
  • Pensioners and senior citizens

Bad for

  • NRIs in need of a 30 year tenure
  • Self-employed borrowers seeking small EMIs

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 financing companies (NBFCs) charge higher interest rates than banks, but you will find some of the lowest rates at LIC HFL. However, pensioners and salaried borrowers will enjoy more home loan benefits than self-employed individuals.

Summary of LIC Home Loans
Interest rates: From 6.90%
Benefits for salaried borrowers and pensioners
More restrictions for NRIs and self-employed individuals
Minimal documentation requirements

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. In addition to its large menu of housing products, LIC home loan interest rates are at an all time low, starting at 6.90%.

LIC Housing Finance ProductFeatures
LIC Home Loan
  • For purchase of home
  • Online home loan sanction facility
Griha Varistha Home Loan
  • For pensioners
  • 6 EMI waiver offer
  • Loan tenure up to the attainment of 80 years
Griha Sudhiva Home Loan
  • Applicants where part of the salary is through cash
  • For nearly retired or self employed borrowers who want an extended loan term
Home Loan for NRI
  • For salaried employees that are non-resident Indians
LIC Plot Loan
  • For purchase of residential plot
LIC Home Construction Loan
  • For the construction of a new property
LIC Home Extension Loan
  • For the extension of a house, like additional room
LIC Home Renovation Loan
  • For renovation or improvement of house
LIC Top Up Home Loan
  • For existing customers with home loan or new customers with home loan balance transfer
LIC Home Loan Balance Transfer
  • For borrowers transferring existing home loan to LIC HFL
  • Offer: Waiver of 2 EMIs

LIC HFL also offers a PMAY Pradhan Mantri Awas Yojana loan scheme.

LIC Home Loan Interest Rates

LIC home loan interest rates start at 6.90%
Based on minimum interest rates for home loans. Rates are subject to change.
LIC home loan interest rates start at 6.90%
Based on minimum interest rates for home loans. Rates are subject to change.

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, State Bank of India and ICICI Bank.

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

Loan AmountSalariedNon-Salaried
Up to 50 lakhs, with Cibil score < 07.40%%7.50%
Up to 50 lakhs6.90% - 7.50%7.00% - 7.60%
50 lakhs - 1 Crore6.90% - 7.70%7.00% - 7.80%
1 Crore - 3 Crore6.90% - 7.70%7.00% - 7.80%
3 Crore - 15 Crore6.90% - 7.80%7.00% - 7.90%
Average Rate in India7.54% to 8.41%7.60% to 8.53%

In addition to floating rates, LIC HFL charges Sure Fixed rates starting from 10.05%.

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 Crore7.15% - 7.95%7.25% - 8.05%
1 Crore - 3 Crore7.15% - 7.95%7.25% - 8.05%
Average Rate in India7.54% to 8.41%7.60% to 8.53%

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: Compare Home Loan Interest Rates

LIC Home Loan Eligibility Criteria

Consider this if you seek the lowest home loan interest rates

Maximum Loan Tenure 30 years
Processing Fee Up to Rs. 15,000

For regular LIC housing loans, you can avail financing up to 90% of your property cost. However, your final loan-to-value ratio will be determined by the loan amount you seek to borrow. Additionally, salaried borrowers can repay their loans up to 30 years, while self-employed borrowers and NRIs are allowed a 20-year tenure. If you are self-employed or a non-resident Indian seeking a longer loan tenure for smaller EMIs, consider DHFL, Axis Bank, or State Bank of India for your home financing needs.

Eligibility criteria differs per applicant and loan scheme, as well. Under the LIC housing loan scheme, borrowers can be no older than 60 years by loan maturity. Under the pensioner loan, the maximum age is 80 years by attainment.

For more information on eligibility criteria, we recommend that you contact LIC Housing Finance Limited customer service.

Read more: Home Loan Eligibility

LIC Home Loan Processing Fee and Other Charges

ChargesAmount
Processing Fee for Home LoansUp to Rs. 15,000
Processing Fee for Griha Sudhiva0.25% to 0.50%, maximum of Rs. 50,000
Processing Fee for Mortgage Loans1.00% of loan amount, maximum of Rs. 25,000
Late EMI Payment Charges1.50% or 2.00% of late EMI, depending on stage of loan tenure

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 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 before 12 months. However, you are expected to pay 2.00% of your late EMI after 12 months.

LIC Home Loan Calculator

Use a home loan calculator to estimate your EMIs before applying. By inputting your home loan interest rate, loan tenure, and loan amount, you can plan your repayments ahead of time. Click here to use the LIC home loan EMI calculator.

LIC Home Loan EMI Repayment Schedule

Our team of financial analysts calculated an EMI repayment schedule for borrowers, as seen below. This example shows the first 5 years of a 30-year loan tenure.

Stage of TenureEMIInterest PaidPrincipal PaidOutstanding Balance
Year 1₹32,930₹343,383₹51,777₹4,948,223
Year 2₹32,930₹339,695₹55,465₹4,892,758
Year 3₹32,930₹335,745₹59,415₹4,833,342
Year 4₹32,930₹331,513₹63,647₹4,769,695
Year 5₹32,930₹326,980₹68,181₹4,701,514
Based on an Rs. 50 lakh home loan over a 30 year tenure. Interest rate is set at 6.90% per annum, with no processing fee calculated in the outstanding balance.

LIC Home Loan: How To Apply

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.

Documents Required

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.

LIC Home Loan Customer Care

If you have any queries about the home loan application process or would like to check your application status, contact LIC HFL customer care through any of the methods below.

Natalia Sanchez-Kumar

Natalia Sanchez-Kumar is a Junior Research Analyst at ValueChampion, specialising in 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.