LIC Personal Loan at very low interest rate, How to apply at https://licindia.in/. Life Insurance Corporation is the largest insurance company in India and apart from various insurance products it also offers its policyholders the option to avail personal loans against their insurance policies. These secured personal loans against LIC policy are available at an attractive interest rate starting at as low as 9% and come with a flexible repayment tenure ranging up to 5 years.
You can avail a LIC loan amount up to 90% of the policy’s surrender value to meet various personal financial needs such as medical expenses, marriage, education, etc. A life insurance policy is meant to provide financial coverage to one’s dependents in case of an untimely eventuality. In addition to this benefit, certain types of life insurance policies also allow policyholders to take a loan against the surrender value of the policy. Keep in mind that you can only borrow a loan against your life insurance policy if your policy has acquired a surrender value.
Life Insurance of India Loan Repayment: You will need to pay interest on the loan amount that you utilise at least twice in a given year. The principal can be repaid at the completion of the loan tenure or can be adjusted from payouts that you or your nominee may be eligible to receive via the policy.
If you have an LIC policy, borrowing a loan against your policy may be a better option borrowing other types of loans. That said, ensure that you familiarise yourself with the various terms and conditions of the loan before you submit the application form for the same.
LIC Loan Details
|Interest Rate||Starts from 9%|
|Loan Tenure||5 years|
|Loan Amount||90% of the policy’s surrender value|
Loan Limits: Under existing rules, the maximum loan amount that can be sanctioned in case of a loan against LIC policy is up to 90% of the surrender value at the time of the application. In the case of paid-up plans, this limit is lower at 85% of the surrender value. In both cases, this is inclusive of the cash bonus that may be applicable to the life insurance policy used as collateral.
Eligibility Criteria for LIC Loan
The following are some key eligibility criteria for those opting for a loan against LIC policy:
- Minimum age of the applicant should be 18 years
- Applicant must have a valid LIC policy
- The LIC policy used for obtaining loan has guaranteed surrender value
- At least 3 years of LIC premium has to be paid in full
LIC Personal Loan Interest Rate
LIC personal loan interest rate starts as low as 9%. However, the personal loan interest rate applicable to a particular applicant varies with the person’s individual applicant profile including the person’s income level, nature of employment, loan amount and tenure desired, etc.
EMI Calculation Using Reducing Interest Rate
Given below is a sample of EMI calculations using personal loan EMI calculator (based on the reducing balance method) taking different loan amounts, tenures and interest rates into consideration:
|Loan Tenure||Monthly EMI Payout (Rs.)||Monthly EMI Payout (Rs.)|
|Loan Amount (Rs.) and Interest Rate||1 lakh @ 9%||5 lakh @ 11%|
|1-year loan tenure||8,745||44,191|
|2-year loan tenure||4,568||23,304|
|3-year loan tenure||3,180||16,369|
|4-year loan tenure||2,489||12,923|
|5-year loan tenure||2,076||10,871|
How to apply for LIC Personal Loan?
- In order to apply for the LIC Personal Loan visit the official website of Life Insurance of India.
- After the home page is opened on the screen of your computer, click on the ‘Online Loan’ under the Online Service (This can be found on the left-hand side).
- As you click on the ‘Online Loan’ it will lead you to a new page, where you will find two options i.e., Loan Repayment and Online Loan Request.
- Now you have to log in with your customer ID, password and date of birth.
- You have to link your bank account number with your policy number so that the loan amount will be auto-credited to the bank account.
Factors Affecting Personal Loan Interest Rates
Here are a few important factors which affect LIC personal loan interest rate:
- Income Level: The applicant’s income often influences the interest rate charged by the lender. Applicants with higher annual incomes are often charged a lower rate of interest on personal loans as they are perceived to have a better repayment capacity and are less likely to default on repayments and vice versa.
- Employment Details: Applicants working with reputed organisations and having a stable job and history of employment may be offered a lower rate of interest on personal loans. The interest charged by the lender is also often influenced by the nature of employment of the applicant- whether the person is salaried or self-employed.
- Relationship with LIC: Having a good existing relationship with LIC – paying your policy premium on time, etc. may help you avail a lower rate of interest on your personal loan.
- Loan Amount and Tenure Desired: Usually, higher loan amounts and longer repayment tenures come with higher rates of interest and vice versa
How to Get a Loan against an LIC Policy?
If you are eligible to take a loan against your LIC policy, you will need to do as follows to borrow a loan:
- Visit the nearest branch of a bank.
- Fill-up the loan application form and submit to the lender’s representatives with the required documents.
- Existing customers of the bank will need to submit minimal documents.
- The lender will verify the documents submitted by you, after which your application will be approved.
- If approved, the loan amount will be disbursed into your savings bank account.
Documents Required to Borrow a Loan against an LIC Policy
A few documents that you will need to submit when borrowing a loan against your LIC life insurance policy are as follows:
- Original policy document
- Proof of identity
- Proof of residence
- Proof of income
- Deed of assignment