When planning to apply for a home loan from LIC Housing Finance Limited, it’s important to understand the LIC home loan processing fee. This fee is crucial for covering the administrative expenses involved in processing your application.
LIC Home Loan Processing Fee
Here’s a detailed breakdown of the processing fees for different types of LIC home loans:
| Loan Types | Processing Fee |
|---|---|
| Standard Home Loans (Salaried, Self-Employed) | Up to 0.50% of the loan amount + applicable GST |
| Special Schemes (e.g., for Govt employees) | Varies (sometimes reduced or waived during promotions) |
| NRI Home Loans | Up to 0.50% of the loan amount + applicable GST |
| Home Construction Loans | Up to 0.50% of the loan amount + applicable GST |
| Plot Loans | Up to 0.50% of the loan amount + applicable GST |
| Home Extension Loans | Up to 0.50% of the loan amount + applicable GST |
| Top Up on Existing Home Loans | Up to 0.50% of the loan amount + applicable GST |
Check Out: Home Loan Eligibility – Salaried vs Self-Employed
Additional Fees and Charges
When securing a home loan from LIC Housing Finance, it’s important to account for various fees beyond the basic processing charges. Here’s an updated and accurate summary of the potential additional costs:
| Charge Type | Amount/Rate |
|---|---|
| Statutory Charges | Rs. 250 – Rs. 1,000 |
| Check Bounce Charges | Rs. 350 |
| Document Retrieval Charges | Rs. 2,500 |
| ECS Dishonour Charges | Rs. 200 |
| Charges for Providing Document List | Rs. 500 |
| Late EMI Payment Charges | 1.5% – 2% per month on overdue amount |
| Charges for Photocopies of Title Documents | Rs. 1,000 |
| Prepayment Charges | Applicable if you repay the loan before tenure (varies by loan type) |
| Foreclosure Charges | Charges for closing the loan before the tenure ends |
| Loan Conversion Fees | Charges for switching to a lower interest rate |
| Stamp Duty & Documentation Charges | Fees vary based on state laws and property value |
Check Out: LIC Housing Finance Home Loan Eligibility Calculator
LIC Home Loan Prepayment and Foreclosure Charges
For those considering making early payments towards their LIC home loan, the prepayment charges are structured based on the source of funds used for the prepayment:
| Payment Source | Prepayment Charge |
|---|---|
| Own Funds | No charge |
| Other Sources | 2% on the prepaid loan amount |
Check Out: Documents Required for LIC Housing Finance Home Loan
Factors Influencing the Processing Fees
The processing fees for LIC Housing Finance Limited (LIC HFL) home loans are influenced by several factors. Understanding these can help you anticipate the costs involved in securing your home loan:
| Factor | Description |
|---|---|
| Loan Amount | Higher loan amounts may incur higher processing fees due to increased administrative work involved. |
| Type of Loan | Different loan products (purchase, construction, renovation) may have different fee structures. |
| Applicant’s Credit Profile | A lower credit score can lead to higher fees as it represents a higher risk to the lender. |
| Property Details | Fees may vary based on the property’s location, type, and the extent of verification needed. |
| Lender Policies | Each lender has its own set of policies that determine the processing fees charged. |
Suggested Read: How to Increase Your Property Value
How to Calculate the Processing Fees?
Here’s how you can estimate the fees based on the total loan amount you plan to borrow:
- Determine the Loan Amount: First, identify the total loan amount for which you are applying.
- Understand the Fee Structure: LIC HFL typically charges a processing fee as a percentage of the loan amount. This rate is generally up to 0.50%, but it can vary depending on the loan product and your borrower profile.
- Apply the Processing Fee Rate: Multiply the loan amount by the processing fee percentage to calculate the fee. For instance, if the fee is 0.50% and your loan amount is ₹1,00,000, the processing fee would be ₹500.
- Consider Minimum and Maximum Caps: LIC HFL may set minimum and maximum caps on processing fees. Suppose the minimum fee is ₹2,000 and the maximum is ₹20,000. Regardless of the calculated fee, you won’t pay less than the minimum or more than the maximum set cap.
Example Calculation: Let’s assume you are applying for a home loan of ₹40 lakh with LIC HFL.
- Percentage-Based Fee: If the fee is 0.50% of the loan amount:
- 0.50% of ₹40,00,000 = ₹20,000
- Minimum and Maximum Cap: If there is a maximum cap of ₹20,000 and a minimum of ₹2,000, the fee you pay remains ₹20,000, as it does not exceed the cap.
Read More: How to Get a Home Loan Without All Property Documents?
Additional Costs to Consider
When securing a home loan from LIC Housing Finance Limited (LIC HFL), it’s important to be aware of various additional costs that come with the processing fee. These costs can significantly affect the total amount you will spend on acquiring your loan. Here’s a breakdown of the most common additional charges:
- Legal Fees
- Technical Valuation Charges
- Stamp Duty and Registration Fees
- Documentation Fees
Suggested Read: LIC Housing Finance Plot Loan
Home Loan Processing Fees from Top Banks in India
The processing fees for home loans vary among India’s leading banks. Here is a table outlining the typical fees charged by some major banks:
| Bank | Home Loan Processing Fee |
|---|---|
| SBI (State Bank of India) | 0.35% of the loan amount (min ₹2,000, max ₹10,000) + GST |
| HDFC Bank | Upto 0.50% of the loan amount or Rs. 3300/- whichever is higher |
| ICICI Bank | 0.50% of the loan amount (min ₹3,000, max ₹5,000) + GST |
| Axis Bank | 1% of the loan amount or ₹10,000 (whichever is lower) |
| Kotak Mahindra Bank | 0.5% – 1.00% of the loan amount |
| Bajaj Housing Finance | Up to 4% of the loan amount |
Also Read: Home Loan Charges and Fees
Home Loan Interest Rates by Top Banks
| Bank | Up to Rs. 30 Lakh | Above Rs. 30 Lakh to Rs. 75 Lakh | Above Rs. 75 Lakh |
|---|---|---|---|
| SBI Bank | 8.50% p.a. onwards | 8.5% p.a. onwards | 8.50% p.a. onwards |
| HDFC Bank | 8.75% p.a. onwards | 8.75% p.a. onwards | 8.75% p.a. onwards |
| LIC Bank | 8.50% – 10.35% p.a. | 8.50% – 10.55% p.a. | 8.50% – 10.75% p.a. |
| ICICI Bank | 8.75% p.a. onwards | 8.75% p.a. onwards | 8.75% p.a. onwards |
| Kotak Mahindra Bank | 8.75% p.a. onwards | 8.75% p.a. onwards | 8.75% p.a. onwards |
| Punjab National Bank | 8.50% – 11.05% p.a. | 8.50% – 11.05% p.a. | 8.50% – 11.05% p.a. |
| Bank Of Baroda | 8.15% onwards | 8.15% – 10.65% p.a. | 8.40% – 10.90% p.a. |
| Bajaj Housing Finance | 8.50% p.a. onwards | 8.50% p.a. onwards | 8.50% p.a. onwards |
| Axis Bank | 8.75%-10.30% p.a. | 8.75%-10.30% p.a. | 8.75%-10.30% p.a. |
| Bank of India | 8.40% p.a onwards | 8.40% p.a onwards | 8.40% p.a onwards |
| TATA Capital | 8.75% p.a. onwards | 8.75% p.a. onwards | 8.75% p.a. onwards |
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Conclusion
Understanding the LIC home loan processing fee is crucial when planning your finances for a home loan. This fee is designed to cover administrative tasks and varies depending on loan details but typically caps at 0.50% of the loan amount. Knowing this helps ensure there are no surprises during your loan application process.
Frequently Asked Questions
The processing fee for an LIC home loan can be up to 0.50% of the loan amount, depending on the specifics of your loan application.
Taking a loan against an LIC policy does not impact your CIBIL score as it’s secured against the policy’s surrender value. Yes, LIC does offer personal loans against life insurance policies.
HDFC offers interest rates between 8.75% and 9.65%, helping reduce monthly payments. LIC HFL provides rates from 8.50% to 10.75%, which may lead to higher savings over time. Comparing loan terms can help choose the right option.
Yes, opting for a loan from LIC is often a solid choice due to their trustworthy reputation and competitive interest rates for loans secured against LIC policies.
Yes, LIC is considered a secure choice for investors seeking stability, making it ideal for those with a low appetite for risk. While mutual funds don’t offer death benefits, nominees can still inherit the investments.
Yes, LIC Housing Finance is highly reliable, holding a AAA/Stable rating from CRISIL, which signifies a strong capacity for timely repayment of its financial obligations.
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