Joining the list of companies raising interest rates following the RBI’s decision to hike repo rate, LIC Housing Finance has increased its benchmark prime lending rate (LHPLR) by 60 basis points, which is used in the pricing of home loans. This will make loans costlier across the tenures and will be effective from June 20.
The revised interest rates on house loans will now start at 7.50 per cent, said LIC Housing Finance in a statement. LIC Housing’s prime lending rate is now fixed at 15.30 per cent, according to the company’s website.
In a borrower has a CIBIL score of 700 or above, the interest rate on home loans more than or equal to Rs 10 lakh will be 7.50 per cent for salaried and professionals. In the case of salaried and professionals having CIBIL greater or equal to 700, the borrower will need to pay an interest rate of 7.55 per cent on home loans up to Rs 50 lakh, 7.75 per cent on more than Rs 50 lakh to Rs 2 crore, and 7.90 per cent on housing loans above Rs 2 crore to Rs 15 crore.
On CIBIL scores between 600 and 699, the interest rate will be 7.80 per cent on home loans up to Rs 50 lakh, 8 per cent on more than Rs 50 lakh up to Rs 2 crore, and 8.15 per cent on above Rs 2 crore and up to Rs 15 crore. Those having a CIBIL score of less than 600 will be offered an interest rate of 8.25 per cent on home loans up to Rs 50 lakh, 8.45 per cent on over Rs 50 lakh to Rs 2 crore, and 8.65 per cent on more than Rs 2 crore to Rs 15 crore.
In the case of credit scores between 101 and 200, or NTC, the interest rate will be 8.20 per cent on home loans up to Rs 50 lakh for salaried and professionals, 8.40 per cent on loans above Rs 50 lakh up to Rs 1 crore.
As the Reserve Bank of India is in the tight monetary policy mode and increasing its key repo rates to control inflation, commercial lenders are also following the suit and raising their interest rates. Several banks have increased their interest rates, including ICICI Bank, HDFC Bank and Punjab National Bank, in the past days.
The RBI’s Monetary Policy Committee last week unanimously decided to raise the repo rate by 50 basis points to 4.90 per cent with the focus on withdrawal of accommodation. It has prompted lenders to increased interest rates on loans.
The retail inflation, based on the Consumer Price Index (CPI), slightly cooled to 7.04 per cent in May, according to the latest data. India’s headline inflation touched a near-eight-year high of 7.79 per cent in April. A sharp drop in the fuel prices after the reduction in excise duty had significantly contributed to bring down the food prices last month, believe experts. The retail inflation in May remained above the upper tolerance limit of Reserve Bank of India (RBI), for the fifth consecutive month.