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LIC loan against property


Interest Rates & Charges

To borrow smartly, one must be able to take out a loan against property with reasonable terms. We are aware of this requirement and have designed our loan to be as affordable as possible. With some of the lowest costs available, LIC’s Loan Against Property is provided at a competitive rate of interest. Furthermore, we promise unmatched transparency in all loan proceedings and there are no hidden fees of any type.


Applicable Fees


Interest rate


A LAP loan interest rate starting at 9.8 percent would help you control costs and keep your EMIs manageable. Fund all types of personal or professional costs while assuring the best possible return.


Processing charges


For loan processing, verification, and other administrative services, we charge a small processing fee. Our fee is 1 percent of the approved loan value, along with the applicable taxes.


Foreclosure charges


In the case of floating rate loans against property, foreclosure charges do not apply.  


LIC loan against property

Types of LIC loan against property Interest Rate

There are two kinds of LIC loan against property interest rates: fixed and floating.

Fixed Interest Rate

Here, the rate of interest charged on the LIC loan against property amount will remain constant throughout the loan repayment period. You know your LIC loan against property EMI obligation at the start of the tenor, allowing you to plan your monthly budget accordingly.

LIC loan against property
LIC loan against property

Floating Interest Rate

Here, LIC loan against property interest rates could change depending on changes to the Marginal Cost of Lending Rate (MCLR), which is the base rate set for banks by the RBI. With changes in MCLR, the interest rate on loans also gets revised. With a lower interest rate, the repayment amount also reduces. On the other hand, if the interest rates increase, your EMI obligation will also increase. A floating LIC loan against property interest rate makes it difficult for you to ascertain your monthly financial obligation.

LIC loan against property Interest Calculation Method

There are two methods to calculate interest: flat rate method and the reducing balance method.

In the flat interest rate method, the interest rate is based on the complete loan amount you pay during the repayment period. In case of reducing the balance method, the rate of interest on the LIC loan against property will be considered and calculated on the basis of the outstanding loan amount.

Flat Interest Rate Calculation

EMI = (principal + total interest payable) / loan tenure in months i.e. total interest payable = P x r x n/100

Where, ‘P’ is the principal loan amount, ‘r’ is the rate of interest, and ‘n’ is the loan tenure in months.

Floating Interest Rate Calculation

EMI = [P x r x (1 + r) ^n] / [(1 + r) ^(n-1)]

Where, ‘P’ is the principal loan amount, ‘r’ is the rate of interest, and ‘n’ is the loan tenure in months.

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