LIC Housing Finance slashes home loan interest rates to 6.66%

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Mortgage financier LIC Housing Finance has announced a reduction in its interest rates to 6.66% from 6.90% for home loans up to Rs 50 lakh.

New borrowers whose loans are sanctioned till August 31, 2021, will be able to avail of this special offer given the first disbursement is made on or before September 30, 2021.

The rate of interest will depend on the creditworthiness of the borrower, as indicated by their CIBIL scores.

LIC Housing Finance claims that this is the lowest interest rate on a 30-year home loan and also said that customers will now be able to track their loan applications through the HomY app, and don’t need to make personal visits to the offices anymore.

Management view

The company’s MD and CEO Y Viswanatha Gowd said that considering the impact of the pandemic, they wanted to offer an interest rate that would help in uplifting the overall sentiments and aid more individuals to fulfil their dreams of owning a house.

The company last month had reported a 5% fall in its profit after tax, which stood at Rs 398.92 crore in the quarter ended in March 2021, owing to higher provisioning for bad loans. Its profit after tax for the same period a year ago was Rs 421.43 crore.

Net profit For FY 2020-21, grew by 14% to Rs 2,734.34 crore vs Rs 2,401.84 crore in the previous year. The total disbursements for January-March quarter were at Rs 22,362 crore, up by 97% as against Rs 11,323 crore in the year-ago period.

Developments 

Last month, Life Insurance Corporation of India (LIC) had said that it will infuse about Rs 2,334.70 crore into LIC Housing Finance, its subsidiary by picking up an additional stake in the company.

LIC Housing Finance said that it will issue shares at Rs 514.25 per unit to its promoter LIC on a preferential basis. The board of directors of the company had approved preferential shares up to 4,54,00,000 through a private placement to LIC.

After the allotment of shares, LIC’s shareholding in LIC Housing Finance will go up from over 40.31% to 45.24%. An extraordinary general meeting is scheduled to be held on July 19 where the company will seek shareholders’ approval for the preference issue.