Transfer of Home Loan from LIC HFL to SBI

POSTED BY Sameer D ON June 4, 2013 4:44 pm COMMENTS (13)


I have a home loan of 35.75 lac from LIC HFL with a fixed rate of 10.7% for first 3 yrs. and floating then after. Overall tenure is 15 yrs.

My EMI started from July 2012 and after making pre-payment twice the oustanding loan now is 31 lac and tenure has been reduced to almost 12 Yrs.. SBI had a promotion counter in my office and their representative suggested me to do a pre-payment of 1 lac more, so that the outstanding amount will be 30 lac and SBI offers interest rate of 9.95% for loan upto 30 lac.

I’m thinking of home loan transfer from LICHFL to SBI. Will there be any charges I need to pay to LIC as well as SBI?

My current EMI is Rs.40054/-

With the rate of 9.95% on 12 Yrs. tenure, I calculated my EMI and it comes to around Rs.35800/-which is almost 4K less every month.

Will this save any money for me considering the penalties & charges to be paid at both the places – LIC HFL & SBI?

Thanks & Regards,

13 replies on this article “Transfer of Home Loan from LIC HFL to SBI”

  1. Belekar says:

    I have loan of LICHFL Rs.38.75 lac having EMI Rs.43173 per month for 12 years.Now i have been paid Rs.21 lac in May 2017.The balance amt is Rs.15 lac, also reduce emi for same preriod with EMI Rs.18000 per month .Can I transfer my loan to SBI and it will beneficial or ….


    I have also a home loan of Rs. 27 lac of Rs. 30878 EMI for 15 yrs. Iwant to switch over from LICHFL to S.B.I OR HDFC.Pl. comment whether it will be beneficial for me? THANKS.

    1. Prabhas says:

      it is not beneficial to transfer the loan if the difference in interest rate is less than 1.5%. Work out with your existing lender for a rate reduction in lieu of a conversion fee charged. If that doesn’t work out, calculate the amount saved after calculating your foreclosure charges from your present lender + processing charges + stamp duty etc from your future lender. If the difference is large enough, go ahead and transfer the loan

  3. murahari says:

    I have home loan in LIC HFL for house construction and they released 1st payment of 500000, now I would like to switch to SBI MG, is it advisable,
    any one can please explain the benefits.

  4. AVIJIT says:

    Sir i have taken home loan from lichf rs 1500000 for the period of 20 years @10 % ,my emi stands rs 14440 per month,fixed for 24 months,now they have sent me a letter that your loan will be converted to floating rate and the applicable rate would be 11.75%.floating. moreover my liquidation date was 15.7.2032 earlier. but now the last installment date will be 15.3.2038 ,and emi will be rs 14967. how can it be 5 years more. please suggest

  5. harishnb says:


    I have a slightly different question, I had taken composite loan form LIC HFL for land purchase and house construction. The interest rate was fixed for 2 years i.e. 10% (as wife is first applicant), I have completed the house construction and residing . Now after two years LIC has sent a letter stating they would changing the interest rate to 11.75% floating. I wanted to know if would it be advisable to shift to some other bank like SBI for lower floating interest rate? As its floating there should not be any penalty charges. I had availed 29L loan and now the outstanding amount is 25,26411. Please advice.

  6. Sameer D says:

    Thanks Ashal for your valuable reply.


  7. Dear Sameer, to bring down to 30L, you ‘ll lose the liquidity of your money of 1L Rs. that’s the reason I’m opting for 10.1% ROI for 31L & not 30L. This same 1L Rs. can be parked later on in Max Gain to save interest outgo & still the money ‘ll be available to you in case of need.

    Opt the option which is more suitable to your needs.



  8. Dear Harsh, first a small correction. the ROI for loans upto 30L is 9.95% not 9.9%. 🙂

    Coming back to your original query, the transfer can be done subject to your property documents are as per SBI’s requirement. To get your transfer done, please contact the nearest SBI branch or the one, where you do have an existing SB account. Interestingly most SBI branches now a days do have loan agents recruited from retired employees of SBI itself.

    Please check & take help of the same for your own good. Be ready for lengthy paper work & time to get your loan sanctioned. Till the time loan is not sanctioned, you ‘ll feel frustrated many a times but once you are in, it ‘ll be a cool breeze. 🙂



    1. Sameer D says:

      Hi Ashal,

      Thanks for your valuable reply. I have a similar question like Harsh 🙂

      Why transferring 31 lac with ROI 10.1% & why not 30 lac with ROI 9.95%

      31 lac 10.1% Approx EMI Rs.37227
      30 lac 9.95% Approx EMI Rs.35766

      Is 9.95% is fixed rate or something and 10.1 is floating which may get less than 9.95 in future? (which is more unlikely :-))

      Thanks & regards,

  9. Harsh Singhal says:

    Just to add SBI ROI for loan below 30 lac is 9.9 and for above loans is 10.10.

  10. Dear Sameer, please check the fee involved from your SBI office desk. At the same time, check with LICHFC for preclosure penalty. As your loan is a mix of fixed + floating there should be a penalty. How much? Either read your loan agreement or contact LICHFC.

    In case you are opting SBI, please opt SBI Max Gain only. In my personal view, please do not prepay 1L Rs. more to make it 30L. Please switch the full 31L Rs. loan @ 10.1%.



    1. Harsh Singhal says:

      Ashal Ji –
      SBI Max gain is really the good choice. I too have the similar case, and have a outstanding of 35 lac in LIC HFL.

      Would you please explain the logic of you suggesting to transfer the whole amount which is 31 lac in Sameer’s case and not the 30 lac after repaying 1 lac?

      Regarding the take over of loan, how to contact SBI for loan take over, as didn’t get much help from their customer care, and they don’t home loan agent as other banks have?

      Thanks to you and your valuable comments!
      Harsh Singhal.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.