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LIC Housing Finance Announces Lowest Home-Loan Rates Yet

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  Published in House and Home on Tuesday, December 23rd 2025 at 4:58 GMT
      Locale: INDIA

LIC Housing Finance Announces New Home‑Loan Rates – What You Need to Know

LIC Housing Finance has recently revised its home‑loan interest rates, offering some of the lowest rates in the market for borrowers with strong credit profiles. The change comes amid a broader trend of banks and housing finance companies lowering rates to attract more customers in a competitive environment. In this article, we break down the new rate structure, explain how your CIBIL score can impact the rate you receive, and walk you through the process of checking your eligibility and applying for a home loan with LIC.

1. The New Rate Structure

LIC Housing Finance’s updated home‑loan rates are tiered according to the borrower’s CIBIL score – a standard credit‑worthiness metric in India. The rates announced on 28 April 2024 are as follows:

These rates apply to the standard home‑loan product for a loan term of 15–20 years. LIC also offers a special “First‑Time Buyer” rate of 8.15 % for applicants who are purchasing a property for the very first time, provided they meet the eligibility criteria (see below).

Why the Cut?
The decision follows a sustained dip in the Reserve Bank of India’s policy rates and a shift in borrower sentiment toward more affordable financing. LIC’s move positions it as a strong contender against traditional banks like State Bank of India, HDFC Bank, and Axis Bank, whose home‑loan rates hover around 8.70 %–9.20 % for similar credit profiles.

2. How Your CIBIL Score Affects the Rate

The CIBIL score is a 3‑digit number ranging from 300 to 900, derived from your credit history, payment behaviour, and outstanding debt. The higher your score, the lower the risk perceived by lenders, and consequently, the lower the interest rate you can negotiate.

Key takeaways:

If you’re in the 700‑749 bracket, you may still qualify for the “First‑Time Buyer” rate if you’re purchasing your first home. For scores below 650, LIC still offers competitive rates compared to other housing finance companies, but you may need to provide additional collateral or a higher down‑payment.

3. Checking Your CIBIL Score

Before applying, it’s essential to confirm that your credit score falls into the desired bracket. LIC’s website offers a direct link to the CIBIL Score page (via the “Check Your CIBIL Score” section). The process is straightforward:

1. Visit the CIBIL website (https://www.cibil.com/).
2. Enter your PAN, Date of Birth, and mobile number to request a free score once a month.
3. Review your score and the detailed credit report to spot any inaccuracies.

If your score is lower than you’d like, consider the following remediation steps:

• Pay off pending dues: Late payments on credit cards or loans have the biggest impact.
• Avoid opening new credit lines: Adding a new loan or credit card can lower your score temporarily.
• Dispute errors: If your report contains mistakes (e.g., a loan you paid off that is still listed as active), file a dispute with CIBIL.

4. Eligibility Criteria

Beyond a strong CIBIL score, LIC Housing Finance looks at several other parameters to assess loan eligibility. The details are summarized below:

Note: LIC offers a special “Home Loan for Women” scheme where female borrowers receive a 0.10 % discount on the interest rate for the first 3 years, subject to the same eligibility rules.

5. Application Process

1. Pre‑qualification – Visit LIC’s “Home Loan Pre‑Approval” portal. Enter your basic details, CIBIL score, and expected loan amount. LIC will provide a quick pre‑approval in 24–48 hours.
2. Documentation – Gather the required documents (income proofs, property documents, identity & address proofs, etc.). Detailed checklist available on the “Eligibility” page.
3. Loan Offer – Submit the application online. LIC will review the documents and send a formal loan offer within 5 business days.
4. Processing & Disbursement – Once you accept the offer and sign the necessary agreements, the processing fee (usually 1 % of the loan amount) will be deducted. After final verification, the loan amount is disbursed into your account, typically within 7–10 business days.

6. Comparative Analysis

Below is a quick comparison of LIC Housing Finance’s new rates against other major lenders:

LIC’s rates are the lowest among the top five lenders for borrowers with excellent credit scores. Even for mid‑range scores, the difference can amount to savings of ₹2,000–₹3,000 per month over a 20‑year term.

7. Tips to Secure the Lowest Rate

• Maintain a clean credit profile: Pay bills on time, keep credit utilization below 30 %.
• Opt for a shorter loan tenure: A 15‑year term usually attracts a slightly lower rate than a 20‑year term.
• Leverage the First‑Time Buyer scheme: If eligible, the 8.15 % rate can save you an additional ₹1,200/month.
• Negotiate processing fees: While LIC’s processing fee is 1 %, some brokers offer a discounted rate for high‑value loans.

8. Final Thoughts

LIC Housing Finance’s updated home‑loan rates are a welcome development for prospective homeowners, especially those with strong credit scores. By understanding the relationship between your CIBIL score and the interest rate, you can better position yourself to secure a competitive offer. Remember to check your credit score early, ensure all eligibility criteria are met, and take advantage of the pre‑approval process to expedite your loan approval.

Whether you’re a first‑time buyer, an existing borrower looking to refinance, or someone simply comparing rates, LIC’s new structure offers an attractive blend of low rates and flexible terms. For the most accurate, up‑to‑date information, always refer to LIC Housing Finance’s official website and the links provided within their loan product pages.