• By Aditya Pratap Singh
  • Tue, 05 Dec 2023 03:20 PM (IST)
  • Source:JND
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Life is so unprecedented, we don't know when we might fall into an unfavorable situation. In all sudden developments, the requirement of money is something common. To meet the sudden cash requirement, people often get help from close friends or opt for a personal loan. To get a personal loan, your CIBIL score should be high.

If CIBIL is poor, you will get a personal loan with a high-interest rate and pay huge interest on the principal. But if you have an LIC policy in your name, you can get a loan against the policy.

A loan against LIC policy does not affect your CIBIL score and the interest rate will be lower than a personal loan as well. Today, we will talk about everything about taking a loan against the LIC policy.

Eligibility for loan against LIC Policy

A loan against the LIC policy is a secured loan because you mortgage your insurance policy as collateral. After a certain period, a policyholder can take a loan against it. You must be at least 18 years of age and have paid the annual premium for the policy for at least 3 years. Generally, You can get a loan of up to 90 percent of the total policy value.

Also Read: RBI Shutdowns One More Bank; Know What Will Happen With Depositors Money

Interest Rate on Loan Against LIC Policy

The interest rate on loans against policy ranges from 10-13 percent, which is lower than a personal loan. One advantage of a loan over an LIC policy is that you don't have to worry about paying the EMI every month. You can pay in installments at your convenience.

However, if the policyholder does not repay the loan, once the policy matures, the loan amount including interest will be deducted and the remaining amount will be given to you.

Steps to apply for a loan against LIC policy

You can either apply online or offline to avail loan against LIC policy. To apply offline, you need to visit the LIC office and apply for a loan along with KYC documents.

  • To apply online, you need to register for LIC e-Services.
  • Next, log in to your account and check your eligibility for a loan against the policy.
  • If Eligible, read the loan terms, conditions, interest rates, and other details carefully. Next, apply and upload the KYC documents online.
  • The loan amount you get depends on the surrender value of the LIC policy.

Also Read: You Must Take Care Of These 5 Things Before Taking Education Loan

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