The 17-year-old star has praised her singer pal for setting a good example for young girls through her music and thinks they are close because they both understand the music business.
She explained: ''I think there are artists who are really incredible role models and that's something I admire. I feel like Taylor is a really good role model and I think that the girls who listen to her music are so devoted to her, and I think what she's saying is pretty cool. It's empowering.
''If we have the same work problems, we know each other's lives better. It's always good befriending people who do a similar thing.''
Before they became friends, the 'Royals' hitmaker criticised Taylor, 24, for being ''perfect and unattainable'' but Lorde says Taylor wasn't offended by her comment.
She revealed: ''She was like, 'It's fine, if all you've done is call someone perfect it's not a bad thing.'
Lorde also hit out at Taylor's best friend Selena Gomez, 21, over her sexually suggestive song 'Come and Get It', and the New Zealand-born star admits she has learned her lesson from the media storm her remarks created.
She said: ''I feel weird talking about it because I stated an opinion and people took that and made it mean something. It's easier never to talk about anyone else's work because they might take it the wrong way.'
While Lorde looks up to Taylor as a role model, she is reluctant to be considered one herself and hopes her fans realise she's not perfect.
The singer elaborated: 'I'm probably going to screw up at some point - probably soon - and people are going to say, 'You're not a good role model.' But I figure, I'm 17 and I'm very much perfect. I'm figuring this out too and I think people are aware of that.'