Paying High Interest Rate for your LICHFL Home Loan? Reduce it NOW!
Several individuals who have taken personal loan from LIC Housing Finance Ltd. (LICHFL) are complaining that they are becoming cheated by LICHFL by charging a substantial desire level for the house personal loan they have taken couple several years back. When most of the general public and non-public financial institutions are charging only 8%-nine% desire, present borrowers of LICHFL are becoming billed 10% to 12% desire!
Persons are transferring there personal loan to most popular SBI Maxgain and other non-public sector financial institutions, but the procedure requires time and dollars.
Why these kinds of a big distinction in desire level?
We checked the sanction letter of couple and found that they have taken a floating personal loan which had a ‘n’ several years fixed level, for illustration, fixed level for 5 several years @ 10.fifteen% p.a. and then at floating level connected to LHPLR.
Preset level for 5 several years @ 10.fifteen% p.a. or as prevailing at the time of disbursement for the interval of desire for the personal loan. Soon after 5 several years, the level of desire will be reset with reference to the then prevailing floating level of desire connected to LIC Housing Primary Lending Rate(LHPLR). Current LHPLR is 13.75.
What is LHPLR?
LHPLR stands for LIC Housing Finance Primary Lending Rate. It is the level at which LICHFL gives personal loan to its shoppers. As you know LICHFL is not ruled by RBI but like other HFCs (House Finance Providers) it is ruled by NHB (Countrywide Housing Financial institution). They had the independence to come to a decision their lending level and for the financial loans taken all through 2010-2011 the LHPLR was all around 13.75%.
What is the distinction among LHPLR/PLR, Base Rate and MCLR?
Banks lending rates are controlled by RBI and just before July 01 2010, all house financial loans ended up connected to Primary Lending Rate(PLR), which is very similar to LHPLR. On July 01, 2010, RBI issued rules to Banks to present House Financial loans according to their Base Rate.
On 1st April 2016, RBI launched MCLR (Marginal Price of Money), in which the level of desire is straight connected to the sector conditions. The level can maximize or lessen at speedier rates when compared to base level. MCLR centered personal loan is additional useful all through reducing desire level although base level is useful when desire level boosts. Just to give you a distinct picture, as of April 1, 2017, base level of SBI is nine.1% although MCLR 8%. This does not indicate if you are going with MCLR, you will be offered financial loans at the level of 8%, they costs .sixty five% more than MCLR, which tends to make the effective level as 8.sixty five%.
How can I change my personal loan from LHPLR to Base Rate or MCLR?
As we mentioned higher than, MCLR may possibly search desirable now, but retain in intellect, when the desire level goes up, MCLR level shoots up. Also it is not possible to swap back to base level when migrated to MCLR. Becoming claimed that, you just need to check out your house branch and submit the “Ask for for Re-Producing the House Bank loan” type.
The type asks for your private particulars, personal loan account range and signature. You have to pay Rs. 1000 + provider tax (around Rs. a hundred and fifty) as cheque in the name of “LIC Housing Finance Ltd.”. Make confident to publish your personal loan account range and name behind the cheque.
An acknowledgement will be produced which will have the present-day level, present-day range of installments pending and so forth. and the upcoming level and balance installments. You will be astonished to see the reduction in range of installments with the new level! The new level will be effective from the subsequent EMI date.
How to make partial prepayment?
If you have surplus quantity in your account, it is recommended to make a prepayment which will noticeably decrease the desire stress on you. Before prepayment to LICHFL was a laborous procedure but now you just need to submit a cheque in favor of “LIC Housing Finance Ltd. A/c No. – YOUR Bank loan ACCOUNT Variety” to the head workplace or any LICHFL branch.