LIC Loan: The Life Insurance Corporation of India (LIC) offers a loan in exchange for a policy. The best part is that this loan is simple to obtain and has a low-interest rate. Learn everything there is to know about it.
New Delhi, India: During the Corona era, many people lost their jobs. In such a case, anyone may require financial assistance. Getting a loan without a job, on the other hand, is challenging. However, you will be pleased to learn that the Life Insurance Corporation of India (LIC) offers loans secured by its policies. The best part is that this loan is simple to obtain and has a low-interest rate.
It’s a loan that’s backed by collateral.
Personal loans are available through the Life Insurance Corporation of India (LIC). This loan can be used for travel, higher education, medical emergencies, weddings, and house repairs, among other things. This is a policy-backed secured loan. Your insurance policy is maintained as collateral in this. If a borrower is unable to repay the loan, LIC may compensate them from the insurance policy’s maturity or the claim sum.
Can pay till the end of the term
A loan from the Life Insurance Corporation of India (LIC) has a minimum term of 6 months, but it can be repaid over the entire maturity period. Along with this, a LIC loan has the option of simply paying the interest and having the principal subtracted from the maturity amount later. Only endowment, income, and unit-linked plans with a surrender value are eligible for it. It’s worth noting that this isn’t available with term plans.
Rate of interest on a loan
Taking a loan from the Life Insurance Corporation of India (LIC) has a relatively low-interest rate. LIC currently charges 10.5 percent interest on this, which is less than other banks or organizations in the market. You’re probably wondering how much money you’ll get from the loan. LIC provides loans up to 90% of the policy’s surrender value. This restriction can be up to 85 percent of the policy surrender value in the case of some paid-up plans. The surrender value is utilized as security in both circumstances.
It is necessary to have a policy paper.
You’ll need Aadhar Card, Voter ID Card, Passport, and Aadhar Card as proof of residency, as well as a Voter ID Card, Driving License, and Utility Bill as proof of income. It’s possible that your pay stub and bank statement will be lost. A canceled check from the account where the loan will be taken out should also be included.
Loan Against LIC Policy Requirements
Loans against LIC policies are also subject to certain conditions. The applicant’s minimum age, for example, should be 18 years old. The applicant must have a current LIC policy. The LIC insurance used for the loan has a guaranteed surrender value, whereas term policies do not have this feature. For at least three years, the LIC premium must be paid in full.
Apply online or in person.
You can apply for a loan against your LIC coverage online or in person. You go to the LIC office and complete out the loan application form together with the necessary KYC documents, which you then submit with the original policy document. You can access your online account if you have enrolled for LIC e-services.