LIC vs HDFC Bank Home Loan: Which Saves You More Money in 2025?
While selecting a home loan, a comparison of LIC vs HDFC Bank Home Loan in 2025 is also important for effective saving and planning. Though LIC Housing Finance provides interest rates from 8.00% p.a., HDFC Bank is from 8.30% p.a., with flexible loan amounts up to ₹10 crores. Find out about different processing charges, prepayments, and special features to make the correct financial choice.
LIC vs HDFC Bank Home Loan: Which Saves You More Money in 2025?
LIC vs HDFC Bank Home Loan: Which Saves You More Money in 2025? Are you looking to choose between LIC vs HDFC Bank Home Loan? The right choice could help you save thousands of rupees throughout your loan period. HDFC Bank starts its home loan rates at 7.60% p.a. LIC provides improved rates from 7.50% p.a. This variation can affect your monthly installments right away. The processing charges also differ in these lenders. HDFC Bank will take 0.50% of the loan amount or ₹3,000, whichever is greater. LIC charges between 0.25% and 0.50% with limits between ₹5,000 to ₹15,000 plus GST. Both lenders provide you with a maximum of 30 years to repay, but they have different maximum loan sizes. HDFC Bank allows you to borrow between ₹6 crore and ₹10 crore, whereas LIC has a limit of ₹5 crore. You must know which one saves you more money in the long run before you make this important financial decision.
LIC Home Loan Interest Rate
| Rate of Interest | Max funding | ||
| Credit Score | ROI | Loan Amount | Funding % |
| >800 | 7.50% |
<=30 Lakh
|
90%
|
| 775-779 | 7.85% | ||
| 750-774 | 7.95% |
30<75 Lakh
|
80%
|
| 725-749 | 8.15% | ||
| 700-724 |
8.50%
|
75 Lakh>
|
75%
|
| -1/NTC | 8-8.5% | ||
| Apply Now | |||
HDFC Bank Home Loan Interest Rate
| Rate of Interest | Max funding | ||
| Credit Score | ROI | Loan Amount | Funding % |
| >=800 | 7.60% |
<=30 Lakh
|
90%
|
| 780 – 799 | 7.65% | ||
| 750 – 779 | 7.75% |
30<75 Lakh
|
88%
|
| – | – | ||
| – | – |
75 Lakh>
|
88%
|
| – | – | ||
| Apply Now | |||
LIC vs HDFC Bank Home Loan: Key Comparison Overview
Comparing LIC vs HDFC Bank requires more than a quick look at interest rates. Let’s get into how these major home loan providers match up against each other in 2025.
A full picture of LIC vs HDFC Bank Home Loan options reveals key differences that could substantially affect your financial future.
| Features | LIC Housing Finance | HDFC Bank |
| Starting Interest Rate | 7.50% p.a. | 7.60% p.a. |
| Processing Fees | 0.25% to 0.50% (Min ₹5,000, Max ₹15,000 + GST) | Salaried: 0.50% or ₹3,300 (whichever is higher) Self-employed: 1.50% or ₹5,000 (whichever is higher) |
| Maximum Loan Amount | Up to ₹5 crore | ₹6-10 crore |
| Maximum Loan Tenure | Salaried: 30 years Self-employed: 25 years |
30 years |
| Loan-to-Value Ratio | Not mentioned | Up to 90% (loans up to ₹30 lakh) Up to 80% (₹30.01-75 lakh) Up to 75% (above ₹75 lakh) |
| Credit Score Benefits | Better rates for scores above 750 | Not publicly disclosed |
| Special Features | Griha Varishtha for pensioners | Interest rate benefits for women borrowers |
| Prepayment Charges | Zero prepayment penalties | No charges on adjustable rate loans 2% for fixed-rate loans after 36 months (refinanced funds) |
| Late Payment Penalty | 1.5% – 2% per month | Up to 24% p.a. |
| Check Bounce Charges | ₹350 | ₹300 |
Which Home Loan Saves You More in 2025?
The numbers tell an interesting story when we compare LIC vs HDFC Bank Home Loan options to find the best money-saving deal in 2025. The interest rate difference stands out as the main factor that affects your savings over time.
LIC Housing Finance dropped its prime lending rate to 8% in April 2025. This rate beats HDFC Bank’s starting rate of 8.30%. This half-percent gap means big savings for homebuyers throughout their loan period.
Let’s get into the actual numbers with a simple calculation. Here’s what you’ll pay on a ₹50 lakh loan over 20 years:
| Lender | Interest Rate | Monthly EMI | Total Interest Paid |
| LIC Housing | 8.00% | ₹41,822 | ₹50,37,280 |
| HDFC Bank | 8.30% | ₹42,825 | ₹52,78,000 |
| Difference | 0.50% | ₹1,003 | ₹2,40,720 |
You could save around ₹2.4 lakhs by choosing LIC over HDFC Bank.
Your credit score plays a huge role in the final rate. LIC’s best 8% rate goes to people with CIBIL scores above 750. Scores between 600-699 might face rates from 9.55% to 9.75%.
The processing fees add to your total cost. HDFC Bank’s fee goes up to 0.50% of the loan amount or ₹3,300, whichever is higher. LIC’s fees are lower at 0.25% plus GST.
HDFC Bank’s loan limit reaches ₹10 crore, while LIC caps at ₹5 crore. This means HDFC might be your only choice for high-value properties.
LIC offers better value in 2025 for loans under ₹5 crore because of its lower rates and fees. People with lower credit scores or those needing bigger loans might find HDFC Bank more suitable, even with higher costs. By analyzing LIC vs HDFC Bank Home Loan can be able to prefer the better choice between these.
Additional Features That Can Affect Your Savings
Your overall savings from an LIC vs HDFC Bank Home Loan depend on much more than just interest rates and loan amounts. Several additional features can affect your total costs. Let’s look at what you need to know to make a smart choice. Let’s look at what you need to know to make a smart choice when comparing LIC vs HDFC Bank Home Loan options.
Prepayment and Part Payment Options
You can cut down your interest costs and loan tenure through prepayment options. Here’s what each lender brings to the table:
- HDFC Bank: No prepayment penalties exist for adjustable-rate loans. Fixed-rate loans after 36 months come with a 2% charge if paid through refinanced funds. Your funds don’t attract any charges.
- LIC Housing Finance: You won’t pay any prepayment penalties, no matter when you choose to prepay your home loan. This could save you money if you plan to close your loan early. When comparing LIC vs HDFC Bank Home Loan, LIC’s zero prepayment penalties stand out as a clear advantage.
Balance Transfer Benefits
Both lenders let you switch your existing loan through balance transfer facilities:
- HDFC Bank’s balance transfer rates range from 8.70% to 9.55%. You can extend tenures up to 30 years and get top-up loans up to ₹50 lakhs.
- LIC Housing Finance welcomes loan takeovers without any prepayment penalties. This makes it a good option if you’re looking for better terms.
In the LIC vs HDFC Bank Home Loan comparison, HDFC Bank offers competitive balance transfer rates.
Insurance Features
LIC Housing Finance welcomes loan takeovers without any prepayment penalties. This makes it a good option if you’re looking for better terms. Many borrowers prefer LIC vs HDFC Bank Home Loan options based on the flexibility of LIC’s balance transfer.
Insurance Features HDFC Bank’s home loan insurance through HDFC Life is a great way to protect your family from loan burden if something unfortunate happens. The insurance premium also gives you tax benefits under Section 80C. This is an important factor when comparing LIC vs HDFC Bank Home Loan insurance options.
Credit Score Impact
Your credit score plays a vital role in determining available features. LIC rewards scores above 750 with better rates, while scores between 600-699 face higher rates (9.55%). These rate differences can save you thousands over your loan tenure. When evaluating LIC vs HDFC Bank Home Loan, the impact of credit scores is crucial.
Conclusion
LIC vs HDFC Bank Home Loan offers lower interest rates starting at 7.50% compared to HDFC Bank’s 7.60%, potentially saving ₹2.4 lakhs on a ₹50 lakh loan over 20 years. LIC also charges lower processing fees (0.25%-0.50% with ₹15,000 cap) versus HDFC (up to 0.50% for salaried, 1.50% for self-employed) and has no prepayment charges. However, HDFC shines with higher loan limits of up to ₹10 crore compared to LIC’s ₹5 crore maximum, making it ideal for premium properties. Both lenders offer their best rates to borrowers with credit scores above 750, so consider your specific needs and financial situation before deciding. The LIC vs HDFC Bank Home Loan comparison clearly shows LIC’s cost advantage for standard home loans, while HDFC is more suitable for high-value properties.
