Whenever an emergency comes to your home or business. When the need for money comes, then you choose the personal loan. And the personal loan interest rate ranges from 16 to 24%. Which is quite high. So If you have a LIC policy, then you can take a loan on your LIC policy at a very affordable interest rate.
If you have taken an insurance policy from the country’s largest insurance company LIC Life Insurance Corporation of India. So you can take a loan for any of your work on that insurance policy. And loans are not available on plans like LIC’s term plans, and cancer cover.
What are the Conditions for Loan on LIC policy?
So if you have a LIC policy, and you are paying its premium regularly. Then you can get a loan against insurance very easily. New plans of LIC are selling after 1st February 2020. You get the loan only after two years on that.
How many loans availed on LIC policy?
So to take a loan against LIC policy, you have to first know the surrender value of your policy. Surrender Value is the amount that you are going to get when you tie up your policy. So if you take a loan against LIC policy then you can get a loan up to 90% of your surrender value.
Who can take a loan against LIC policy?
So any person who has taken LIC’s endowment plan on LIC’s policy can take a loan. But there are some conditions for this. Such as the age of the person taking the loan should be more than 18 years. To avail of the loan, his policy should be 3 years old. And he should have paid his premium regularly. He can get a loan only up to 90% of the surrender value of his policy.
Benefits of taking a loan on LIC policy
The first advantage
You get a loan here at a vary affordable interest rate. You get a loan on LIC’s policy at an interest rate of 9 to 10%. When it comes to personal loan, you get an interest rate of 16 to 24% in personal loan.
The second advantage
Your CIBIL score is not seen here. If you want to take a loan against LIC policy. Because of your second loan before, or because of your bad credit score, you will not face any problem in getting the loan. Because here you are given a loan against the policy by pledging the policy. So due to this the process also gets faster. There is no hassle with the CIBIL score here. Neither do you need any guarantee nor any reference? No more background verification is done here. Due to which its process becomes very quick.
Otherwise, if you go to take a personal loan, then your credit score checks there. Your verification is done. Your documents are verified. Verification is also done at your home, or even at your office, or place of work. Agents also go for verification. Where you do not have all these hassles in taking a loan on LIC policy. You get the loan easily, and its process is also complete in 3 to 4 days.
The third advantage
The third advantage is no processing fee. This is a great advantage of taking a loan against LIC policy. If you take a loan against LIC policy, LIC does not charge processing fees or any other charges from you. Due to which you can take a loan on LIC policy whenever you need it. And when the money comes, you can REPAY it. You do not have to pay any kind of charges in LIC while taking a loan, or repaying. When it comes to personal loans, here you get a processing charge of 2 to 3% while taking the loan. And if you repay the loan early, then you also incur loan surrender charges there.
The fourth advantage
If you have taken a loan against LIC’s policy. And you are not able to pay it back, you don’t have any problem. If you are not able to REPAY on the loan taken on LIC policy. So when your policy matures, the maturity amount deducts the loan amount. The rest amount is paid to you. All you have to do is pay the premium of your policy regularly. And deposit the interest of the loan in LIC every 6 months.
The fifth advantage
The fifth advantage of taking a loan on LIC policy is that if you surrender the policy of LIC. So the insurance cover that you have comes to an end. Whereas if you take a loan on that policy, then whatever need of money you need is also fulfilled by you. And the insurance cover you have also continued.
Documents required for loan
So first of all to take a loan on LIC policy, You have to deposit your original policy in LIC. Apart from this, you have to give your ID proof such as Aadharcard, and PANcard, and your bank details in which the loan amount transfer.
So if you have a LIC policy, and you need money then it is cheaper than taking a personal loan. And the easy way is to take a loan against your LIC policy.
Which LIC plans loan facility available?
There are many plans of LIC in which you have a loan facility available. Like Jeevan Labh, Jeevan Umang, Single Premium Endowment Plan, New Jeevan Anand, Jeevan Lakshy, Jeevan Pragati. All the other endowment plans under which you get the surrender value of the policy. You can take a loan from LIC on all those policies.