Mumbai: In the last five months, there has been a sharp decline in the number of home buyers due to Corona virus epidemic (COVID19) and lockdown. Meanwhile, LIC has announced a cut in its interest rates to woo new customers. LIC Housing Finance Ltd, a home loan company, said on Wednesday that it has reduced the interest rate for new customers taking home loans to 6.90 percent. This is the lowest ever interest rate on a home loan.
This is the condition for taking a loan at low interest
Home loan will be made available to customers whose CIBIL score will be 700 or more. LIC Housing Finance has said in a statement that the rate of interest on home loans up to Rs 50 lakh will be started from 6.90 percent for customers holding a score of 700 or more in CIBIL. Similarly, there will be an interest rate of 7 percent for those taking home loans above Rs 80 lakh with the same score.
Siddharth Mohanty, managing director and CEO of LICHFL said, “The interest rate on the company’s home loan has reached the lowest level ever, so the monthly installment on the loan to the customers will also be reduced. Attractive price points and cheap EMI will help increase demand for buying houses.
He said that through this new product, the company wants to create demand in the housing sector. Earlier in April, the company reduced the interest rate on home loans to 7.5 percent for new customers who bought houses with a score of 800 points or more in CIBIL.
Mohanty said that the cost of funds has also softened after the Reserve Bank (RBI) cut the repo rate. The cost of funds for the company currently remains around 5.6 percent. He said that less than 25 percent of the company’s debt is under the ban on installment payments. At the same time, out of the loan of Rs 13,000 crore given for the construction work of the company, 8,500 – 9,000 crore rupees are under the ban on the payment of installments.
Special plan for pensioners
The company has also released a special home loan product, Home Senior, for pensioners. Under this, the term of the loan has been kept till the completion of 80 years of the customer or maximum 30 years, whichever will be earlier in it. Under this scheme, facilities such as exemption of six EMIs and 48-month moratorium on installment payment for construction houses are also available to the customer who buy a ready-built house.