Home loan transfer from LIC HFL to SBI bank

POSTED BY Senthil ON March 25, 2014 1:19 pm COMMENTS (78)

I had taken Home loan from LIC HFL on Oct 2011 with ROI 11.15% fixed for 5 yrs. Now that its completed only 29 months of the tenure( out of 240 Months), I would like to transfer the loan to SBI as it is giving low interest rate when compared to LIC HFL. Sure that there will be additional charges from both banks(LIC & SBI), but would like to know how much will be charges and whether it will have impact to my existing balance loan amount.Following are the details of my existing loan.

Sanctioned amnt : 24,50,000

Principal O/S : 23,62,373

ROI : 11.15% (fixed for 5yrs)

EMI: 25,597/month

Please suggest me a good direction to have my EMI reduced.

78 replies on this article “Home loan transfer from LIC HFL to SBI bank”

  1. surender says:

    Why does sbi charges 0.5% while processing the home loan transfer?
    Is this a mandate charge as per rbi ?
    can we negotiate this change with bank?
    Please tell.

    1. Its the charge of all the staff work, there is work involved in processing the loan. Thats why !

    2. Mahadevan Narayanan says:

      I just cheked with sbi my branch in chennai. Now there is no processing fee for take over. Only legal and valuation person charges. This may come around 5500

  2. pazhani says:

    hi i have taken homeloan &also my project of ph.d topic is compartive study of sbi&lic hfl any information is means send to me

  3. Nitesh says:

    I have a Home loan with ICICI since 2011, for Rs 20 lakhs running at interest rate @ 10.5 % as on Jan 2nd 2017. I heard that SBI has reduced home loan to 8% interest rate now. I want to immediately transfer my home loan to SBI in Bangalore. Please guide me what is the best and fastest procedure to get this done.

    1. I am not sure how to do that. You need to get in touch with SBI for this.

    2. Samit Prasad says:

      Discuss with ICICI manager about rewriting of Rate of interest and also discuss with SBI branch manager for necessary ROI, processing fee and searching fee, etc.

  4. Mukut Das says:

    Dear Sir, I had taken a housing loan of Rs. 16,20,000/- from Axis Bank in Dec 2012 on floating interest basis. Now I am thinking off to switch it over to SBI Home Loan. I would like to know, how insurance cover will be transfered to new SBI home loan?

    1. Hi Mukut Das

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  5. Lokendra Kumar says:

    I was take home loan an Amt of RS 12,87,000/- from LICHFL as interest rate is 10.25 but present interest is 11.5. It is very high. No I want to transfer my hoam loan to SBI. Can I transfer my home loan. Please give favourable direction.

    1. This will require a detailed analysis and out of scope of this blog

  6. Rakesh says:

    Hello everyone,

    Need some help!

    I have taken a home loan of Rs. 20,00,000/- from LICHFL in August/September 2012 with interest rate 10.7% fixed for 3 years. Now my fixed tenure is completed with this month and starting next month I will be paying floating charges. But shockingly when I spoke with my home branch employee about the future interest rate they said going forawrd interest rate will be in between 11.5% – 12.5%, which is really high in the present days, as SBI is offering for 9.75% and HDFC is offering for 9.9%. These two banks have even waived off processing fee too.

    I came to heard that if I pay a minimal amount of ~1400 rupees, LICHFL will convert my interest rate to 10.5%, which is still 0.75% higher compared to SBI and 0.6% higher to HDFC.

    Could any one please guide me what is the procedure to transfer the loan amount (OS Rs. 18,13,459 /-) from LICHFL to SBI, time taken for transfer of amount, approximate charges I will be spending for transfer.


    1. I think for transfer process you should be talking to HDFC or ICICI only !

      1. Rakesh says:

        Hi Manish,

        Thanks for your reply.

        I have received a call from HDFC yesterday and they said as my flat comes under gram panchayat (which is not a approved HUDA layout), they wont process the loan.

        Could you please tell me how should I go a head?

        Could you please even tell me what is the reason behind you not suggesting SBI rather suggesting ICICI?


        1. It not that ICICI is bad, but SBI is best. If you cant get it from SBI, then try ICICI and others.

        2. rajavardhan says:

          Hi Rakesh,
          have you transferred your home loan . my case is also similar to yours .im planning to transfer to SBI . if you contact SBI what are the charges and documents needed for it.

          1. Karthik says:

            Hi Rakesh ,
            Have you transferred to SBI….Even i have a loan with LIC and looking to transfer to SBI.Please update

    2. Nachiket says:

      Hi Rakesh,

      My case is also same as you. I have already completed fixed tenure & now it is showing interest rate as 11.70% on LIC HFL account.

      I contact Area manager, he said that i will have to fill one rewriting form & have to pay some Rs. 1,100 then it will converted into 10.20%. this is one time deduction in the interest rate as mentioned in the rewriting form.

      My query is can i transfer loan to other bank after re-writing the same as mention above??
      Please anyone help.

      1. Tarun says:

        Same case as mine Nachiket. Did you got any help on this?

    3. som says:

      Dear Rakesh
      If you are housing loan is still not taken over by any other bank, then I suggest you to go for BOB with 9.65 ROI with floating with no processing charges and the processing is really fast in Bangalore

    4. Swapan Kumar Mahato says:

      I have taken a home loan of Rs. 20,00,000/- from LICHFL in March’2015 with interest rate 10.1% fixed for 2 years. Now my fixed tenure is completed with this month and starting next month I will be paying floating charges. As rate of LICHFL is very high (10.10%),I want to switch over to SBI where the rate is 8.6%.Please advise me to for further course of action towards taking over by SBI and what will be the exit charges of LICHFL ?

      1. THe process is as simple as to first understand how much you will have to pay in LICHL and then talk to SBI on this and check how much are you saving

        1. Sandip B says:

          I have taken home loan from ICICI for 29.5 lacs at current ROI 9.25% (Base Rate). They have facility of conversion to MCLR which is at ROI 8.65%, but they charge 0.5% as conversion fees which is coming to be around 16K. BOB is offering loan at MCLR ROI 8..35% fixed for one yr. Their processing fees is coming around 16-17K.

          Pls advice do I transfer my home loan to BOB or wait further?
          Thanks and Regards

  7. Sumit says:

    I have taken a loan from LIC housing. I took under fixed rate plan for 3 years now it has been converted under floating rate plans. Currently ROI is 12% for my home loan which is quite high compare to other bank. I have decided to transfer my home loan to PNB Bank but LIC housing asking prepayment charges while transferring because as per their Area Manger it is take over process and will have to pay prepayment charge even my loan come under floating plans.
    My loan section letter clearly states that I am NOT supposed to pay any prepayment charges if I fall under floating interest rate plan. Here is the statement/clause which is mention in loan section letter.

    “Under floating rate period, prepayment charges are not applicable. Under fixed rate period, the prepayment charges will be Nil if paid from own sources else 2.00% on the loan amount prepaid + ST”.

    Kindly suggest what should I do.

    Sumit Kumar

  8. daulat says:

    hi i am daulat i am also taking loan from LICHFl 14.40lac and for two year fixes rate and then after it will increases market rate. i want to transfer my loan to sbi and is their any charges of lichfl to transfer loan please suggeat mi
    thanks and regards
    daulat bhabad

  9. kumar says:


    I have taken 28L loan from LICHFL with 10.70% interrest fixed for 3 years ,now i have completed 3 years and the current interest rate was conveted to 12% floating. LIC has an option of reducing the interest to 10.50% floating after making the payment of 12000Rs.My current outstanding is ~25.5L.
    As of now some of the banks like HDFC/SBI/Punjab/Standard chartered are offering a home loan transfer with 9.95-10% interest on home loan transfer.
    Canyou please suggest me which is the correct option
    to opt for transfer it to other banks or continue in LIC HFl by paying the 12000Rs. I am planning to close the balance amount in 4-5 years by making the part payment.
    If i make a home loan transfer will they allow me to close the balance amount without any hurdles.

  10. raj0090 says:


    I have taken my home load from LICHFL (11.75% Fixed for 3 years )and want to transfer the loan to SBI.

    These are the details. Loan disbursed on 07 May 2012.

    OI (%) EMI FUP Principal O/S Principal Repaid Interest Repaid Repaid Premium
    11.75 19,937.00 0 7 Jul 2015 1,925,773.68 6,509.09 53,301.91 0.00

    Can anyone let me know if there are any charges that I have to pay to LIC if I move to SBI?


    1. Sachin says:

      dear all,

      I empathy you all, as I am too a loan bearer and victim of the high floating rate after the initial 2 years of honeymoon period.

      If your property has the relevant documents (Especially the OC) you can surely transfer your loan to any of the banks or NBFC.

      but beware, everything comes at a price. The new bank/nbfc will charge you processing fee, legal fees which approx ranges around +/- 25000 INR. This transfer is only worth if you get a good floating rate, don’t forget to check the hidden clauses as sometimes they are only applicable for few months to a year.

      I checked with my local LIC branch office (which surprisingly are very cooperative) and they gave an offer (company offer and not individual) where we pay 0.8% of outstanding loan + service tax ++ cess tax and they offer you 10.5% floating.

      if you think this offer suits you the best, you can still continue with them (Pros: No paperwork, time loss due to Service provider transfer, banking process etc / Cons : you might end up paying more interest (probably 0.25 – 0.5% more which is still quite a amount)

      hence please spend some time with LICHFL to get the best rate, compare with the new one, unless you see the substantial amount saved, you can continue.


  11. swarup says:

    Sir I have taken a housing lone of Rs 1150000 from Lichfl in 2013 at an Roi of 10% but now i hav outstanding of Rs 1057000 balance at an Roi 11.75% my emi is 11113. So it is better for me to switch the lone to any other bank or HFC. If yes kindly suggest me the same and what will be the savings.

    1. Ashish says:

      Visit bank and get your rate of interest changed 10.90 by paying approx rs.10,000/-

  12. Hi, I also have the same confusion. Took a loan of 20L in 2012, 10 yrs fixed interest @10.95% at LICHFL. O/S amount comes to 19,30,000. Thinking of SBI/ICICI. but am confused on the charges and also about going floating. How much variation can we expect in monthly EMI? Kindly suggest


    1. Right now take it with any bank you get it. If you are getting from SBI its the best

      1. Sujatha says:

        Thank you so much Manish

    2. Sarav says:

      Have you transferred your loan from LICHl to other banks?
      If so, how much prepayment penalty?
      Because, I too have taken loan from LICHL @10.95% fixed rate and am thinking of moving to bank.

      1. Harish says:

        Have you shifted from LIC? I also took from the same bank with 10.95%. AM thinking to get back frmo LIC. But becuase its fixe for 10yrs they are charging 2% + Tax.
        SO what would be the best option?

      2. Rajesh says:

        I have transferred my home loan from licfl to SBI. Total cost is 18k for transfer

  13. harikumar says:

    Hi Ashal,
    Thanks to your responses. I have read your and Senthil’s conversation here. My case is same as that of Mr. Senthil. All questions that I’d have had are asked here and answered.

    However following questions come to my mind please provide some updates-

    1. My Loan details for your perusal and guidance for below questions –
    Loan amount outstanding is Rs. 33,37,467
    EMI is Rs. 36,013.
    ROI is ~11.10%
    Total Loan Tenure: 15 years, fixed for 5 years.

    2. Understood there is not much differential benefit in changing from LICHFL to SBI or similar banks due to service fee+ processing fee + mortgage fee etc.

    3. In this case, without transferring loan to another bank can I ask LICHFL to transfer me from existing fixed ROI @ 11.15% to Floating@10.10%? As per your point it will be done at a 0.56% conversion fee, is this right? It will come around Rs. 18,690.

    4. Is there a penalty clause only because I’m on Fixed rate of interest plan or will there be penalty even for customers who are on floating? If it is only for people on Fixed plans then would you suggest moving from LICHFL to other banks after the fixed payment tenure is over?


  14. ashalanshu says:

    Dear Senthil, glad to know the update. 🙂



  15. ashalanshu says:

    Dear Senthil, No problem. Please book the valuation report fee as loss for yourself and move on.



    1. Senthil says:

      Dear Ashal, luckily the cheque has not been passed to the valuation. Stopped it in the branch itself, where I applied for loan.


  16. ashalanshu says:

    Dear Senthil, thanks for being patient with all my cross questioning. 🙂



    1. Senthil says:

      Dear Ashal, I need to Thank you for the guidance with my loan switch over queries.

      And fyi,I tried to stop the cheque payment, but seems already its through to the valuation process. Also If i stop the cheque think it will be considered as cheque bounce and it might affect my CIBIL score 🙁 . Hence waiting for the reply from SBI on the valuation process.


  17. ashalanshu says:

    Dear Senthil, you are starting with a GAP of 1L Rs. in SBI, which is not easy to fill. If possible, please try to repay extra in LIC itself to bring down the loan amount.



    1. Senthil says:

      Dear Ashal, Thanks for the guidance, tink I have to cancel the process and stop the cheque asap.


  18. ashalanshu says:

    Dear Senthil, on the basis of calculation, please continue with LIC as post expenses, the deal with SBI for switching is not very lucrative.



    1. Senthil says:

      Dear Ashal, you meant to continue another 2.5yrs tenure with LIC? Is ther any chance that we can reduce the margin of loss with some additional funds in the OD account with SBI max gain?

      Thanks, Senthil

  19. ashalanshu says:

    Dear Senthil, Yes, I need this amount. Now if you do nothing in LIC, what ‘ll be the situation after 5Y?



    1. Senthil says:

      Dear Ashal, Same I have said in case 1. Copying the same below. This is the the status after completing that 5yrs fixed term, that falls on Nov’16
      O/S principal Amnt : Rs. 22,28,485


  20. ashalanshu says:

    Dear Senthil, if you continue with LIC, what’s the as on date loan value?



    1. Senthil says:

      Dear Ashal, hope you are asking abount current o/s loan principal amount, its Rs. 23,58,727


  21. ashalanshu says:

    Dear Senthil, please compare the calculation in SBI for remaining LIC loan term to get a fair answer. How come in LIC it’s 2450000 Rs. loan and in SBI it’s 2405000 Rs. only?



    1. Senthil says:

      Hi Ashal, The loan which i got from LIC is Rs. 24,50,000. Now that 2.5yrs loan tenure is completed, o/s principal amount + Pre closure penalty comes around Rs. 24,26,000, which will be the takeover loan amount with SBI.


  22. ashalanshu says:

    Dear Senthil, the mortgage registration ‘ll be for loan amount not for property amount. Please calculate the net gain in totality and decide. As the ROI offered to you in SBI ‘ll be 10.15%, it’s 1% ROI difference from what you are paying. yes saving ‘ll be there but due to penalty and other expenses, the net saving ‘ll come down.



    1. Senthil says:

      Hi Asal, below are some of the calc I did this morning.

      Case1 : If I cont another 2.5 yrs(balance of my fixed 5) with same ROI of 11.15% with LIC for 24,50,000 loan amount

      O/S principal Amnt as on NOV’16 : Rs. 22,28,485
      Interest paid till Nov’16: Rs. 6,62,061 ( May’14 – Nov’16)
      Principal repaid : Rs.2,21,514

      case 2: If i switch to SBI @ ROI 10.15% for 24,026,144 (current o/s) provided no extra money in OD account.
      O/S principal Amnt as on NOV’16 : Rs. 23,19,651
      Interest paid till Nov’16: Rs. 6,03,140 ( May’14 – Nov’16)
      Principal repaid : Rs.1,06,492 ( May’14 – Nov’16)

      Below are the difference :
      O/s Princ amnt: Rs: 91166 less with LIC
      Interest paid: 58921 less with SBI bank option

      Here i have taken just 2.5 yrs for the calc as that is the period for which I am penalty. Since wanted to know is it worth converting with Penalty.

      If I take the entire tenure I would save around 6.5L – 7L (amount arrived from Switchme.in website) by switching to SBI bank.

      Ashal, can u help me to confirm the calc i did? Also I had fixed 20yrs tenure for the new loan as well. Is it ok or I have to reduce the tenure to 15yrs to get max benift?


  23. ashalanshu says:

    Dear Senthil, no problem as such. The basic procedure is same so it does not matter you are applying from normal branch or home loan specialized branch.



    1. Senthil says:

      Hi Ashal, Now I am in a confusion to whether proceed with the SBI loan Take over.Reasons are:
      MY o/s loan amount with LIC: 2,36,0000 (rounded)
      Penalty added fro pre closure as its fixed 5yrs loan : 67,000
      For valuation of documents SBI charging Rs.5500 (given cheque already)
      Now they are demanding another 0.25% of my loan amount which comes around Rs. 6500 as processing fee
      An now they added another ting, Mortgage of my house documents to the Banck which comes around 0.5% i.e., 12-13K.

      Now that I have to pay 5500+6500+13000 = Rs.25000 for conversion and already penalty around 70000 added to my loan. Just feeling is it worth now to convert with penalty. Or convert it after 2.5yrs once the loan reached floating rate. 🙁

      Also I would like to know whetehr the mortgage registartion will be for loan amount or for the property value. I had used loan value in the above calc. Am i correct in the calc?

  24. Senthil says:

    I am going to get the loan take over processing done at one of the normal SBI bank branch. Are there any advantages in going for Home loan specialised branches ?


  25. Senthil says:

    Yes…hehehe.. they are correct.. you are the person with more personal experience to answer abt the MG 🙂


  26. ashalanshu says:

    Dear Senthil, on a lighter note, people think – SBI Max Gain should be answered only by Ashal as it’s his pet theme. 🙂



  27. ashalanshu says:

    Dear Senthil, I try to answer most queries. What others’ do, I can not comment. 🙂

    Glad to know that you are taking actions to simplify your financial life and trying to put it on track. My congratulations for your sincere efforts.



  28. ashalanshu says:

    Dear Senthil, in all probability SBI ‘ll ask ECS credit of EMIs from your salary account CITI in this case. Hence you need to do anything.



    1. Senthil says:

      Thanks a lot for the quick replies given. It has helped me alot. I am just reading this forum for the last 3 weeks and that has impacted my financial life and thinking of finances in a different perspective/options. If I have not seen this forum i would be paying 60K+ every year towards my insurance policies and will cont with my LIC home loan for another possible 10yrs. Now after aprtcipating/reading teh forum I ahve stopped around 40K towards my policises and left them paid up. Going to shift my loan to SBI MG (major). Thinking of MFs to invest which was not in any corner of my mind before this.

      But would like to know why is that Ahsal, you alone have replied to my queries (once Raja did), whereas i see many replies some other active participant reply for other queries. Am i missing something?

      Thanks Again,

  29. Senthil says:

    Dear Ashal, My salary account is currently with CITI bank and I dont hold any SBI SB account. Si If i opt for home loan swicth over then sure they are going to open a SB account as well and feel that will be easy for me to trasfer my EMI thru NEFT also. My query is :
    My Salary date : 25th every month
    MY EMI date : 5th (To be fixed with SBI)

    So when can I process the NEFT? say 25th I transfer my EMI amount to SBI SB and so when should i opt NEFT/ECS transfer the same to MG account , is it 5th or doing before that is advisable?

    Else can we directly process the NEFT/ECS from my CITI acount to MG on 5th every month? Which will be profitable/advisable?

  30. ashalanshu says:

    Dear Senthil, choosing 5th means EMI ‘ll credited on 5th and the interest part of EMI ‘ll remain as part of surplus balance till last day of the month before calculation of interest to be debited. So this way, this interest ‘ll also help to save on actual interest outgo.



  31. Senthil says:

    Hi Ashal, Got the documents I need from LICHFL. I am processing the loan takeover with SBI now. In one of the forum reply its said that choosing 5th as the EMI date helps in case of MG account. Can you pls clarify me how its good.?


  32. ashalanshu says:

    Dear Senthil, thanks for the update.



  33. Senthil says:

    Thanks Ashal for the reply. I have started the process with LICHFL. I had requested required documents from LIC for the loan transfer.

  34. ashalanshu says:

    Dear Senthil, please ask LIC HFC to provide a loan closure balance letter. This ‘ll include the penalty charges along with the basic loan and as on date interest. SBI ‘ll finance this final balance.



  35. ashalanshu says:

    Dear Raja, I can not say with surety for rate reduction. As you are indicating that your friends’ experience is opposite, that may be the truth.

    Dear Senthil, if LIC HFC is not ready to switch to lower rate, please switch your loan to SBi Max Gain.



    1. Senthil says:

      Dear Ashal, In case LIC charges me with the 2% as penalty for the loan transfer, will my new bank add the penalty charges to my existing balance amount to the LIC and settle it or I need to seperately pay the penalty charges to the LIC and then process the Loan takeover with SBI thereafter paying the penalty charges. If its possible then is it considered as the topup of my existing balance loan amount ?

  36. Raja says:

    Ashal, are you sure? Many of my friends have switched over from LIC HFL because they refused to convert the loan to a lower ROI even when they were ready to pay a conversion fee.

  37. ashalanshu says:

    Dear Senthil, as your existing loan is on fixed rate, LIC HFC’ll charge a penalty of 2% (plus service tax on it) on your outstanding balance. In my personal opinion, please contact LIC HFC and ask to convert your high rate to a lower one by paying a conversion fee. It’s allowed in LIC HFC. The conversion fee for lowering the ROI ‘ll be 0.56% (including service tax) at your outstanding balance.



    1. Senthil Kumar says:

      Thanks for the replies Ashal/Raja. I am planning to visit LIC HFL office next week. I read one of the replies in this forum that there is no penalties for the conversion in the case of fixed rate also. But will confirm that.

      Ashal, I have read a lot about the SBI max gain in this forum, and I am interested to go for that. IF LIC accepts to reduce my ROI with some coversion fees,shall i go for it or advisable to move to SBI on a long run. Only worry is that the documentation processes at both banks.Think I might need to do multiple visits to both bams :(.

    2. arun says:

      If you opt for loan take over from LIC HFL to sbi after paying 30 emi out of the total 240 emi,do we again have to pay another 240 emi in Sbi or the remainig 210 emi?

    3. Murthy says:

      Hi My question is why we need to pay 2% for other bank transfer. do we can take any legal action on it. or how can we avoid it.


      1. Its the bank rules ! .. It must have been mentioned (in policy T&C) , you signed on it ? How will you not agree now ?

  38. Raja says:

    Shift immediately. LIC HFL will not allow you to shift to a lower rate even after paying conversion fees. It is not a bank. Go with SBI or any other bank to get lower interest rates which are linked to base rates. There will be processing charges, but dont worry about that too much. The money you will save by shifting to a lower ROI loan will be more than the money you will pay in processing fees

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