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!
What is Loan Against LIC Policy?
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.
Features and Benefits of Loan against LIC Policy
Some of the features and benefits of borrowing a loan against LIC policy are as follows:
One of the most satisfying features of LIC is that it offers its policyholders up to 90% of the surrender value as their sum of loan.
There are various online platforms available from where you can apply for a loan against your life insurance policy.
The loan amount is calculated on the surrender value of your policy. The sum of money you can take as a loan is subjected to the rules and guidelines of LIC.
If needed, you can take help from the LIC policy loan calculator to verify whether the loan amount is sufficient for you.
The minimum time interval for loan repayment of LIC is 6 months.
You can save loan processing time by applying for a LIC loan instead of going to a financial institution.
The credit facility of life insurance policies is offered to sole proprietorships, firms, individuals, Hindu Undivided Families (HUFs), partnerships, etc.
The rate of interest for LIC policy is comparatively much lesser than a personal loan. LIC charges only a 10-12% interest rate for loans against the insurance policy.
You can track your loan information through various available online and offline networks.
Interest Rates of Loan against LIC Policy
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:
Scroll down and click on ‘Online Loan’ under the ‘Other Online Services’ section.
Click on ‘Online Loan Request’
A new page will open with two different options – ‘Online Loan Request’ and ‘Loan Repayment’. Click on ‘Online Loan Request’.
Login with Consumer ID and Password
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.
Loan Repayment Policy
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:
Make the payment of the LIC loan interest with the principal amount online.
Pay only the amount of interest while the principal amount can be settled on maturity.
After paying a few years’ interest, repay the principal amount at the time you have sufficient funds.
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.
FAQs on Loan Against LIC Policy
Q1. What is the starting rate of interest of a loan against a life insurance policy?
Ans: The starting interest rate of a loan against a life insurance policy is 10.50%
Q2. What is the tenure of the LIC loan?
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.
Q3. How to calculate life insurance premiums?
Ans: Anyone can compute the life insurance premium with the help of aloan 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.
Q4. Are credit score matters here?
Ans: Since this entire process of loans through insurance policy depends on your LIC documents, it doesn’t need any credit score requirement.
Q5. Does LIC provide personal loans?
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.
Before you go…
Looking for instant 🚀 personal loans 24*7 anywhere, anytime? Get personal loans up to ₹20 lakh starting at 9.9% p.a. Install the Navi app now!
Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
8 Living Room Interior Design Ideas to Suit Every Style in 2023
Union Budget 2023 – 8 Key Highlights You Should Know
Adani Stocks Have Crashed – Here’s Everything You Should Know
10 Best Hybrid Funds to Invest in 2023
Inside Anant & Radhika’s Lavish Engagement
Top 10 Small Cap Funds To Invest In 2023
10 Best Large Cap Funds to Invest in 2023
7 Awe-Inspiring Quotes by Virat Kohli to Motivate You!
We are a diverse group of writers, editors and Subject Matter Experts striving to bring the most accurate, authentic and trustworthy finance and finance-related information to our readers. Our mission is to simplify jargon and industry lingo. We believe sharing knowledge through relatable content is a powerful medium to empower, guide and shape the mindset of a billion people of this country.