Loan against LIC policy: Get money fast at very low interest rate
There are several benefits of taking a loan against the LIC policy. One can get the loan amount disbursed fast against the security of life insurance policy, often within 24 hours.
When in need, taking a loan against LIC policy can be a good decision. There are several benefits of taking a loan against the LIC policy. One can get the loan amount disbursed fast against the security of life insurance policy, often within 24 hours. Also, there is no need to submit extra documents or security and the rate of interest on this loan is also low. Moreover, you can repay the loan taken on the LIC policy as per your convenience. That means, there is nompulsion of making monthly EMI payments to repay the loan. ALso, there is no fixed deadline for repaying the loan. Whenever you have extra money, you can put it in the loan account. After repaying the loan, you will be given back the policy document.
How much loan one can get
One can get a loan up to 90% of the surrender value of the LIC policy. The surrender value is calculated at the time of getting the loan, which is given by LIC itself, not by a third party. That's why the loan amount is cleared very quickly without any extra security. The policy document works as the security. Also, the applicant doesn't need to stop the policy for taking the loan.
At present, LIC charges 10 per cent interest on the loan against insurance policy. This is lower that rates charges on personal loans. Also, one doesn't have to worry about CIBIL score, or last loan record, for taking a loan against LIC policy.
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Who can take the loan
LIC lends to endowment policyholders only. The loan is not given on the money back plan. The loan term is of at least 6 months and if you close the policy prematurely, you do not have to pay any extra charge. The policy should be at least three years old to avail the loan.
The is a translated version of the article first published by Zee Business Online (Hindi)