LIC vs Axis Bank Home Loan: Which Offers Better Interest Rates? [2025]

Charge on fixed loans repaid via non-own sources. Both provide up to 30 years of tenure and loans up to ₹5 crore. Choose LIC for lower upfront costs and no prepayment penalty; opt for Axis Bank if faster sanctioning and flexible options matter more. Your choice depends on whether you prioritize lower costs (LIC) or faster processing (Axis Bank).

Are you unsure which one to choose LIC or Axis Bank Home Loan to purchase your next home? The differences between these two popular lending options could have significant financial consequences well into the future. Unfortunately, with Axis Bank, their rates range from 8.55% – to 9.65%. While LIC Housing Finance has a lower starting rate of only 8.00% – 8.65%. So are you ready to find out which option is an ideal fit for you? Now, let’s look at the different factors that you should be considering when deciding on your options LIC vs Axis Bank Home Loan for 2025

LIC vs Axis Bank Home Loan: Key Comparison Overview

When you get to the point of deciding between LIC vs Axis Bank home loan options, having a strong awareness of the differences that you need to be considering, will help you make wise decisions for your financial future.

Choosing between LIC vs Axis Bank home loan options needs a clear understanding of their differences to help you make a smart financial choice. Here’s what these lenders offer in 2025.

These differences can shape your financial flexibility and total interest costs throughout your loan experience. Think over your options carefully before making your choice between LIC vs Axis Bank Home Loan.

Which Home Loan Saves You More in 2025?

Let’s figure out which home loan option saves you more money in 2025 – LIC vs Axis Bank home loan. The numbers tell an interesting story.

LIC Housing Finance just cut their standard rate by 0.25%. This means their home loan rates now start at 8% (effective April 28, 2025). Axis Bank’s rates begin at 8.55%. The difference can save you a lot of money over your loan period when choosing between LIC vs Axis Bank Home Loan.

Processing fees make the cost difference even bigger. Axis Bank’s fees are 1% of the loan amount plus GST (minimum ₹10,000). LIC charges just 0.25% plus GST. On a ₹50 lakh loan, you pay ₹50,000 with Axis Bank but only ₹12,500 with LIC – saving ₹37,500 right at the start,  making LIC vs Axis Bank Home Loan an important decision to consider.

LIC’s better rates apply to most types of borrowers. Self-employed people with high CIBIL scores can get 8.00% from LIC, while Axis Bank charges 8.65%. Even for loans above ₹5 crore, LIC keeps rates competitive at 8.50% for premium profiles.

LIC’s recent rate cut makes it the cheaper choice for most borrowers in 2025, especially if you have a good credit score. The lower rates and processing fees add up to big savings, particularly for longer loan terms, making LIC vs Axis Bank Home Loan a crucial choice for the future.

Additional Features That Can Affect Your Savings

Your overall savings from a home loan depend on many features beyond just the interest rates when choosing between LIC vs Axis Bank home loan options.

Prepayment Options

These lenders have distinct prepayment policies. LIC vs Axis Bank Home Loan comparison shows  LIC Housing Finance lets you reduce your principal without any penalty, whatever the loan type. Axis Bank follows a different approach – no penalty on floating-rate loans but a 2% charge applies on fixed-rate loans paid through non-own sources. The savings could reach thousands if you decide to close your loan early.

Balance Transfer and Top-up Facilities

LIC’s offerings include balance transfer options from other institutions and top-up loans that need minimal documentation. These top-up loans come with lower interest rates than personal loans and both new and existing customers can access them.

Axis Bank’s balance transfer comes with extra perks:

• Supplementary top-up loans at lower rates than personal loans
• Overdraft facility for increased financial flexibility
• Continued tax benefits on principal and interest payments

Credit Score Impact

Credit scores play a vital role in both bank’s decisions. LIC vs Axis Bank Home Loan analysis reveals that LIC Home Finance stands out by offering loans to “new to credit” applicants. High credit performers with scores above 750 can get LIC rates starting at 8.00% p.a. for salaried profiles. This rate beats Axis Bank’s 8.55% p.a. for similar credit profiles. 

These additional features deserve your attention as they shape your long-term financial commitments.

Conclusion

In making a decision between LIC vs Axis Bank home loans in 2025, pay attention to their major differences. LIC vs Axis Bank Home Loan analysis shows that  LIC provides lower interest rates (8.00% compared to 8.55%) and lower processing fees (0.25% compared to 1%), which can save you more than ₹5 lakhs on a ₹50 lakh loan over 20 years. LIC also does not take any prepayment charges on any loan, whereas Axis Bank takes 2% on fixed-rate prepayment from non-own sources. However, Axis Bank has special features like overdraft facilities that can be more appropriate for certain financial needs. Your credit score (preferably over 750) will decide your best rates, so consider your case before making a decision.