2023-12-02 04:20:15
Title: Need Cash Urgently? Loan Against LIC Policy Could Be Your Answer
To meet sudden cash requirements, many people turn to friends or personal loan facilities. However, difficulties in obtaining a personal loan due to high interest rates and poor CIB score can be a roadblock. In such situations, a loan against your LIC policy could be the solution.
CIBIL Score and Personal Loan Interest Rate
Having a high CIBIL score is crucial to obtaining a personal loan at a low interest rate. However, if you have a bad credit score, you may end up paying more interest on the principal. In contrast, a loan against your LIC policy does not affect your CIBIL score and offers a lower interest rate than a personal loan.
Loan given against LIC policy
This type of loan is given against an LIC policy, as the insurance policy is mortgaged while obtaining the loan. The primary requirement for availing this loan is to have an active LIC policy.
Conditions for availing loan
To be eligible for a loan against your LIC policy, you must be at least 18 years old and have paid the annual premium for the policy for a minimum of 3 years.
Loanable amount
The amount of loan offered is dependent on the surrender value of the LIC policy, which can be up to 90 percent of the policy value. For paid-up policies, the loan amount can be up to 85 percent of the policy value.
Interest and EMI on loan
Interest rates for LIC loans can range from 10-13 percent, which is lower than a personal loan. Additionally, the repayment can be made in installments at your convenience. However, it’s important to note that the interest will continue to accrue, and the loan amount with interest will be deducted from the policy’s maturity amount if not repaid.
Procedure to Apply for Loan against LIC Policy
To apply for a loan against your LIC policy, you can do so both online and offline. The offline process involves visiting the LIC office and submitting the application along with KYC documents. Alternatively, the online process requires registration for LIC e-Services, checking eligibility, and submitting the application along with KYC documents.
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