A financial emergency can arise at any time. And, for certain types of loans, the borrowers need to pledge collateral. In case you do not have any assets to pledge but have a LIC policy, you can use it to get a loan. LIC provides credit facilities against an insurance policy that people can use to meet their financial needs. This article provides all the details regarding loans against LIC policy – its features and benefits, interest rates, eligibility criteria, documents required, how to apply online and loan repayment policy. Read on!
A loan against LIC policy is a type of secured loan offered to the policyholders against the policy’s surrender value. While taking this loan, you have to deposit your life insurance policy as collateral. You can avail of this loan at low-interest rates to meet your financial requirements.
Some of the features and benefits of borrowing a loan against LIC policy are as follows:
Other than the Life Insurance Corporation of India, some financial institutions provide loans against the life insurance policies of LIC. The rates of interest on this loan are as follows:
|Name of Bank||Interest Rates (per annum)|
|Axis Bank||Starting from 10.25%|
|Kotak Mahindra Bank||Starting from 10.75%|
|Bajaj Finserv||Starting from 13%|
|LIC Housing Finance||Starting from 14.80%|
Here are the eligibility criteria for a loan against LIC policy:
You have to submit the following documents while taking a loan against life insurance policy:
Here’s a step-by-step tutorial on how to apply for a loan against LIC policy online:
Click on LIC to go to the official website.
Scroll down and click on ‘Online Loan’ under the ‘Other Online Services’ section.
A new page will open with two different options – ‘Online Loan Request’ and ‘Loan Repayment’. Click on ‘Online Loan Request’.
You will be directed to a new page. As an existing customer, you will have to log in using the Consumer ID and password.
You need to share your account details with the insurer so that the loan amount will be directly credited to your account.
Usually, repayment of the loan can be made within six months or by the maturity period. But loans offered by LIC do not follow a similar principle. It provides no loan payment through the EMI system. Thus, borrowers find it easier to repay the loan.
The policy includes:
Individuals facing problems due to any financial crisis can avail of a loan against LIC policy. It has various advantages like low-interest rates and a lower repayment burden. If you are in a financial crisis and need a loan, you may consider a loan against LIC policy. However, talk to a LIC agent to get all the detailed information. You must also check if you can repay the loan without added financial burden.
Ans: The starting interest rate of a loan against a life insurance policy is 10.50%
Ans: The loan tenure against a life insurance policy is a minimum of six months and a maximum up to the end of the maturity period.
Ans: Anyone can compute the life insurance premium with the help of a loan against the LIC policy calculator. All you have to do is enter the amount of money and age. Then, the calculator will do the rest.
Ans: Since this entire process of loans through insurance policy depends on your LIC documents, it doesn’t need any credit score requirement.
Ans: Yes. LIC India offers personal loans against LIC policy to individuals. Any professional with ages between 23-60 years is eligible for this loan.
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