MUMBAI, Oct 6: The LIC Housing Finance Ltd has slashed interest rates on its loans by up to 75 basis points. This is the fourth time that the company has resorted to a downward revision of its interest rates in the last one year. The revised rates of interest are effective from October 6.

LIC Housing's decision to reduce interest rates on its loans follows close on the heels of the Housing Development Finance Corporation's (HDFC) decision to reduce its interest rates. The premier housing finance company slashed its interest rates on small loans of up to Rs 10,000 by three per cent on September 20. LIC Housing has not reduced the interest rate on small loans up to Rs 25,000. The rate of interest on these loans will remain at 12 per cent. On loans of Rs 25,000-2,00000, the interest rate has been reduced by 50 basis points to 15 per cent, while loans of Rs 2-5 lakh have been reduced by 75 basis points to 15.25 per cent. LIC Housing has also reduced the interest rates on loans of Rs 5-10 lakh and Rs 10-25 lakh by 75 basis points to 15.75 and 16.25 per cent respectively.

The new rates are applicable to loans sanctioned with collateral security of Life Insurance Policy. LIC Housing also offers housing loans to individuals who are not in a position to take out a life insurance policy under Griha Lakshmi scheme.Until now, the rate of interest on loans under this scheme were one per cent higher than other rates. After the revision, only 0.75 per cent higher rate of interest will be charged under this scheme. The company has also come out with a steep reduction in the rates of interest applicable to the Griha Sudhar (repairs and renovations) scheme. LIC Housing has slashed the interest rates by upto 150 basis points on Griha Sudhar. The existing rates are 16.50 per cent and 17.50 per cent for loans from Rs 50,000 to Rs one lakh and Rs one to two lakh respectively. This scheme will now be available to all the centres where LIC Housing has area and unit offices.

The housing finance company has also opened up the facility of Green Channel to all the state capitals. Under this scheme, housing loans are available to professionals like practising doctors, engineers, chartered accountants and management consultants on easy terms.

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