Life Insurance Corporation or LIC is the largest insurance company in India and the most popular one amongst people looking to purchase life cover policies. Along with insurance policies, it also provides loans against LIC policy making it the most sought-after insurance company of this country.
Eligibility for a loan against LIC policy
A loan against an LIC policy is one of the easiest and simplest loans to avail in the finance market, currently. In order to avail loan against LIC policy, you need to fulfil the eligibility criteria mentioned below-
• The applicant should be a valid LIC policyholder
• The applicant should be a resident of India
• The applicant must be aged 18 years or above
• At least 3 years of insurance premium should be paid in full by the applicant
• The chosen policy should be an endowment policy with a surrender value. The maximum loan amount cannot cross 90% of the concerned surrender value. In the case of paid-up plans, it will be 85%.
Terms and conditions for a loan against LIC policy
Before going for a loan against LIC policy, you must have a very clear idea about all the terms and conditions.
• The interest will be paid twice a year
• The minimum tenure is 6 months
• In the case of the policyholder’s death, the interest will be calculated until the date of his/ her death
• The loan amount provided by the LIC is up to 90% of the surrender value and 85% in case of paid-up policies
• If you have gone for a long-term loan, then you will have to pay 6 EMIs prior to repaying your loan
• If your policy matures, then your maturity amount could be utilized to pay off your principal amount
Terms and conditions of a loan will differ based on the policy agreement and document
Benefits of a loan against an LIC policy
Some of the benefits of a loan against an LIC policy are the following-
• Applicants with a low credit score can breathe a sigh of relief, as LIC does not check credit scores before giving a loan. So, do not worry if your credit score ratings are not that impressive.
• Since the policyholder is technically borrowing his own money, the process of loan disbursal will be fast.
• A guarantor or third party is not mandatory.
• It provides a substantial amount of financial flexibility since the policyholder will have to pay the loan interest semi-annually.
• Compared to other banks, LIC does not charge any money for prepayment of loans or processing fees. This allows the policyholder to save a lot of money.
• The interest rate is 9% to 11%, which is quite low as compared to the other options in the market. Other banks charge around 16% to 24% interest on loans.
• You can also apply for a loan against LIC policy online, which makes it more of a convenient option for you.
LIC is one of the most reliable and reputable companies in the Indian market. If you choose to take a loan from here, you can rest assured that you will be in safe hands.
Eligibility for a loan against LIC policy
A loan against an LIC policy is one of the easiest and simplest loans to avail in the finance market, currently. In order to avail loan against LIC policy, you need to fulfil the eligibility criteria mentioned below-
• The applicant should be a valid LIC policyholder
• The applicant should be a resident of India
• The applicant must be aged 18 years or above
• At least 3 years of insurance premium should be paid in full by the applicant
• The chosen policy should be an endowment policy with a surrender value. The maximum loan amount cannot cross 90% of the concerned surrender value. In the case of paid-up plans, it will be 85%.
Terms and conditions for a loan against LIC policy
Before going for a loan against LIC policy, you must have a very clear idea about all the terms and conditions.
• The interest will be paid twice a year
• The minimum tenure is 6 months
• In the case of the policyholder’s death, the interest will be calculated until the date of his/ her death
• The loan amount provided by the LIC is up to 90% of the surrender value and 85% in case of paid-up policies
• If you have gone for a long-term loan, then you will have to pay 6 EMIs prior to repaying your loan
• If your policy matures, then your maturity amount could be utilized to pay off your principal amount
Terms and conditions of a loan will differ based on the policy agreement and document
Benefits of a loan against an LIC policy
Some of the benefits of a loan against an LIC policy are the following-
• Applicants with a low credit score can breathe a sigh of relief, as LIC does not check credit scores before giving a loan. So, do not worry if your credit score ratings are not that impressive.
• Since the policyholder is technically borrowing his own money, the process of loan disbursal will be fast.
• A guarantor or third party is not mandatory.
• It provides a substantial amount of financial flexibility since the policyholder will have to pay the loan interest semi-annually.
• Compared to other banks, LIC does not charge any money for prepayment of loans or processing fees. This allows the policyholder to save a lot of money.
• The interest rate is 9% to 11%, which is quite low as compared to the other options in the market. Other banks charge around 16% to 24% interest on loans.
• You can also apply for a loan against LIC policy online, which makes it more of a convenient option for you.
LIC is one of the most reliable and reputable companies in the Indian market. If you choose to take a loan from here, you can rest assured that you will be in safe hands.
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