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Difficult times can come anytime in life. Of these, the biggest need is money. If these needs are not met at any time then the person manages the situation by taking a personal loan or borrowing money from someone. But if you have a LIC policy and loan facility is available on it, then understand that it can be a big help for you in difficult times.
Loan taken against LIC policy is generally cheaper than personal loan. The good thing is that the repayment facility in this loan is very easy. Usually EMI starts from the month immediately after taking the loan. But there is no burden of paying EMI every month on this loan. You can repay this loan as per your convenience. Know more information about this loan…
Benefits of taking loan against LIC policy
Loans against LIC policy come under the category of secured loans. Because loan guarantee is your life insurance policy. It does not require much paperwork and the loan is also available quickly. Customers can get the loan amount within 3 to 5 days. One advantage of loan in LIC is that you do not have to surrender your policy. In this way the benefits from V do not end. These loans are cheaper than personal loans. Also, there are no processing fees or hidden charges while availing it. This can avoid additional cost of loan.
No hassle of installments every month
This is a good time to repay the loan taken against LIC policy as the tenure of this loan is at least 6 months till the maturity of the insurance policy. Generally LIC policies are for long term. In this way a lot of time is available. Its repayment is very easy. Customers do not have to worry about paying EMI every month. You can make payment once the money is deposited. But keep one thing in mind that annual interest will also be added to it. If a customer repays the loan within a minimum period of 6 months then he will have to pay interest for the entire 6 month period.
Option 3 to repay the loan
– Repay the entire principal amount along with interest.
– Settle the principal amount along with the claim amount on maturity of the insurance policy. In such a situation, you will have to pay only the interest amount.
– Pay the annual interest amount and repay the principal amount separately.
loan rules
– Loans against insurance policies are available only on certain policies like traditional and endowment policies.
– The loan amount is decided according to the surrender value. The loan can range from 80 to 90 percent of the surrender policy value of your policy.
– The interest rate of the loan policy is determined on the profile of the policy holder. Usually it ranges from 10 to 12 percent.
– While giving loan against the policy, the insurance company pledges your policy.
– The company has the right to terminate your policy if you fail to repay the loan or if the outstanding loan amount exceeds the surrender value of the policy.
– If your insurance policy matures before the loan payment, the insurance company can deduct the loan amount from your amount.
How to apply for loan
To take a loan against the policy, you can apply online or offline. To apply offline you have to visit LIC office and apply for the loan along with KYC documents. Register for LIC e-Services to apply online. Then login to your account. Then check whether you are eligible to take a loan against insurance policy or not. If you are eligible then read the loan terms, conditions, interest rate etc. carefully. Then submit application and submit KYC documents online.