Life Insurance Corporation of India’s housing finance company (LICHFL) has reduced its benchmark for home loan lending rate by 25 basis points (0.25%). In a press release LIC HFL said that this rate reduction will benefit both existing and new home loan borrowers from April 28, 2025. This rate cut in the home loan’s benchmark comes after the Reserve Bank of India on April 9, 2025, reduced the repo rate by 0.25%. The interest rate for home loans through LIC HFL now starts from 8%.Read below to know the details:
LICHFL home loan interest rate reduced
It’s noteworthy that the home loan’s interest amount has become more affordable due to this rate cut, but the rate cut happened with the benchmark for these loans and not the loan’s interest rate in itself. This benchmark – LIC Housing Prime Lending Rate (LHPLR), serves as the reference rate for determining the interest rates on all LIC HFL loans.
“A 25-basis points reduction in its LIC Housing Prime Lending Rate (LHPLR), following the recent policy rate cut by the Reserve Bank of India. This reduction will benefit both existing and new borrowers by making home loans more affordable. The revised interest rates will now start from 8% and will come into effect from 28th April 2025. The LHPLR serves as the benchmark rate for determining the interest rates on all LIC HFL loans,” as per the press release dated April 25, 2025.
Tribhuwan Adhikari, MD & CEO of LIC HFL said, “The interest rate cuts are in line with the RBI’s decisions and current market scenario. We believe this move will boost consumer sentiments and stimulate housing demand, especially among the affordable homebuyers.”
For which LIC HFL customers will this home loan rate reduction create an impact?
Broadly speaking home loans can be classified into two categories: fixed rate home loans and floating rate home loans. This rate reduction will benefit floating rate home loans. The reason for this is that under the floating rate of home loans, the interest component keeps on changing as per the market scenario. This type of floating interest rate home loan depends on the benchmark rate, so whenever the benchmark rate changes, the interest rate gets revised.According to ICICI Bank website: “As compared to a Fixed Interest Rate, Floating Interest Rates are comparatively cheaper. Fixed Interest Rates are 1% – 2.5% higher than Floating Interest Rates. The increase and decrease in the Floating Interest Rate is temporary, as it varies as per the market trends, movement of the benchmark rates and as determined by the bank. Home Loans and other loans are now linked to the benchmark Repo rate. The bank decides the margin, however the changes in your effective rate would depend on how the Repo rate changes.”
Can you make EMI payments for LIC HFL home loans online?
According to the LIC HFL website, If you are a registered customer portal then online payment is available in case you have missed the EMI due date. The procedure for same is as given below:
- Login with user id and password on customer portal.
- Click on Pay Online.
- Select Loan Account and click on “Get Dues”.
- The amount due as on date will be shown for the selected loan account.
- Click on Pay.
- Select the mode of communication.
- Select whether message to be sent on registered mobile or email id. If No, mention alternate mobile / email id to receive the message.
- Read the terms and conditions and click on I accept all terms and conditions of LICHFL.
- You will be redirected to the Payment Gateway site.
- After making payment through Net Banking payment, payment summary will be shown.
- Click on “Download Receipt” to download payment acknowledgement receipt.
- Actual receipt will be mailed to you on your registered email id.
