LIC Housing Finance cuts home loan rates by 100 bps
BS Reporter / Mumbai Feb 04, 2009, 00:59 IST
LIC Housing Finance (LICHF) has slashed lending rates for new borrowers by 100 basis points across various loan categories. Home loans up to Rs 30 lakh, irrespective of the tenure, would now be cheaper by 100 bps at 8.75 per cent, while for loans above Rs 30 lakh, the rates are lower at 9.75 per cent as against 10.75 per cent earlier. The new rates are effective from February 1.
“Earlier, similar loans with a tenure up to five years charged 9.25 per cent and loans with tenure between five and 20 years attracted 9.75 per cent. Now we have decided to aggregate the two schemes and charge same interest rate,” LIC Housing Director & CEO R R Nair said. About 80 per cent of LICHF’s loans fall under the Rs 30-lakh category, with an average loan size at Rs 16 lakh.
After the meeting with stand-in Finance Minister Pranab Mukherjee, many public sector bank chiefs, including UCO Bank and Corporation Bank, had indicated a cut of 50-100 bps in lending rate.
State Bank of India has already decided to offer home loans at 8 per cent for a year, irrespective of tenure and amount.
Though the present move would not benefit the existing borrowers, it would review the decision on April 1.
“We have passed on the benefit of incremental reduction in costs to the new borrowers. We always take a quarterly review of the lending rates for the existing borrowers, as we take into account the average cost of funds which is next due in April,” Nair added.
On January 1, the company reduced lending rates for existing borrowers, which is presently in the range of 10.75-11.25 per cent, by 75 bps.
During the December quarter, the firm posted a 26.70 per cent rise in net profit at Rs 134.33 crore and disbursed Rs 1,944 crore. The firm’s total borrowing in 2008-09 would go up to Rs 11,400 crore as compared to Rs 7,490 crore last year.
Nair said, “The repayment outgo has increased with rising costs, so our borrowings for FY09 have increased. We have already borrowed Rs 8,800 crore in FY09 and we would require another Rs 2,500 crore to support our annual disbursement target of Rs 10,000 crore.”
Dear Sir,
I am virender from Genpact.On sunday i went to one project which is approved by LIC.As i discursed with LIC Home loan Agent there he said they will give 110% funding to customer who buy a flat in this venture.How it is possible can you clarify Ref details Pranit happy homes " THE NEST".
Regards,
Virender.
Beware! There is strategy behind the 8.75% ROI for the new loans. This 8.75% is not linked to any PLR and is fixed for first 3 month. After 3 months the then prevailing floating rate that is linked to PLR will be applicable for the loan.
The bad part is, none of the LIC staff tells this and this info is passed to the customer (that too in a difficult to understand text) through the Loan Offer Letter.
Hi,
I am LICHF customer. My current interest rate is 11%.
Company has reduced interest rates for new borrowers thats good thing.
But besides it company should also reduce the inte
rest rates for exiting customers. In this recession company should also pay attention for its existing customers. It will help them a lot specially for those customers who are working in private sectors.
Hi, this is Amith. I am basically from Bangalore, working as a Asst. Store Manager for a Retail company. My monthly net salary is 10k per month. I was planning to start a small scale business with less investment. I need a loan for this. loan amount will be around 1.5 lakh.(one and a half lakh). I planned to run a business and also to work in the company. both together. pls provide me the details.
Content Guide
LIC Housing Finance (LICHF) has slashed lending rates for new borrowers by 100 basis points across various loan categories. Home loans up to Rs 30 lakh, irrespective of the tenure, would now be cheaper by 100 bps at 8.75 per cent, while for loans above Rs 30 lakh, the rates are lower at 9.75 per cent as against 10.75 per cent earlier. The new rates are effective from February 1.
