Apply for LIC Home Loan Interest Rate 2017 & Have a Pleasant Stay

The years of staying on rent may have become slightly overbearing on your finance as well as the freedom. The hassles resulting from the constant shifting of homes due to rental accommodation are very well known. So, why not buy your dream home? Sounds interesting, isn’t it? Obviously, you would have to mull the home loan option given the price bracket of houses which are in lakhs to crores. Where would you like to apply for the loan? I guess, LIC Housing Finance is one of the lender options that you would be privileged to avail, won’t you? But before testing the option on your finance, you would want to check out the interest rate, right! But don’t stop at the interest rate alone. I mean to say, you should go beyond LIC Home Loan Interest Rate 2017 and find what does it mean to you. Let’s do this exercise now to ensure a nice and pleasant stay at the home you are looking to buy on a loan.

What’s the Interest Rate?

The interest rates charged by LIC Housing Finance are based on the loan amount sought and the gender of an individual. On a loan amount of upto ₹25 lakhs, female borrowers can be offered an interest rate of 8.35% per annum. On the other hand, male borrowers would have to service the loan at a slightly higher rate of 8.40% per annum. When the loan amount sought touches ₹1 crore, both male and female borrowers are expected to pay off the debt at 8.50% p.a. For loans of upto ₹3 crores and ₹5 crores, the applicable interest rate would be 8.70% and 8.80%, respectively, for both male and female borrowers.

What About the EMI on LIC Home Loan Interest Rate 2017?

Do you know the factors that help calculate the EMI? No? It’s the loan amount, tenure and interest rate that go on to decide the EMI, abbreviated for Equated Monthly Installment, to be paid each month over the course of the debt. The monthly installment calculation can be seen through the EMI calculator. Just enter the required variables in the calculator and the applicable EMI on your loan amount will be before your eyes to take note of. Also, you can get an idea of the overall interest repayment that lies ahead. So, why not take the help of an example below to find out the EMI and interest?

Example-On a home loan of say ₹40 lakhs, the interest rate applicable will be 8.50% per annum. And if you have got 20 years to pay off the debt, the resultant EMI would be ₹34,713. When it comes to interest outgo over the course of 20 years, it will be ₹43,31,103.

Save Bucks with Balance Transfer Option

When you look at the prevailing market conditions, the LIC’s rate would be one of the best in the segment with as low as 8.35%. Those who are not the part of LIC Housing Finance but servicing the home loan somewhere else at a higher interest rate can transfer their outstanding balance to the state-owned home finance company and enjoy the benefits of lower rates.

Suppose a 20-year home loan of ₹50 lakhs is running under your name at a bank charging an interest rate of 9.50% per annum. The EMI payable is ₹46,607. After 3 years, you have an outstanding balance of ₹47,08,776. By this time around, you happen to have paid interest of as much as ₹13,86,613. If you continue to go this way, you would end up paying a total interest of ₹61,85,574 by the time when your loan gets over.

But if you transfer the outstanding loan, the EMI for the remaining 17 years would be ₹43,711, resulting in a saving of ₹2,896 on the monthly installment front. Meanwhile, the interest repayment at 8.50% rate will be ₹42,08,308. If we add this to the interest amount you have already paid, the resultant gross comes out to be ₹55,94,921. To know the exact saving on interest, you need to deduct this amount from the overall interest payable at your existing lender. Going by that principle, you can save an interest of ₹5,90,653 (61,85,574-55,94,921).

Yes, LIC will charge a balance transfer fee of ₹5,000+18% GST. So, the overall fee amount would be ₹5,900. Even if we deduct this fee amount, the saving does not reduce by much as it stands at ₹5,84,753.

So, in our study, it is found that LIC Home Loan Interest Rate 2017 is a good option to avail. The housing finance firm provides loan for a maximum period of 30 years, allowing you to service the debt at lower installments. The interest rates are attractive, and thus there shouldn’t be any doubt on availing the home loan from LIC Housing Finance.