Personal loan against LIC policy
- People can even apply for the personal loan against the LIC policy.
- At times when a person is surrounded by financial trouble and there is an urgent need for money, then a person tends to borrow money from friends or acquaintance.
- However, you have the option of taking a personal loan from the bank.
- It is a quick way to get money to fulfill financial needs.
- Although interest rates charged by the banks are very high for personal loans.
- Those people who can’t afford to pay such high-interest rates can avail of personal loans against the LIC policy.
- Also, the procedure to apply for a loan against LIC policy requires less documentation.
How to get a personal loan against LIC policy?
To be eligible to avail of personal loans through the LIC policy, an applicant must have paid the full premium for the last three years.
How to apply
- A person can personally visit the LIC branch office.
- Or a person can ask his agent to do all the formalities.
- Your basic documents for a personal loan.
- You need to submit original policy documents.
- Also, a canceled cheque is needed.
- ID proof (Aadhaar card, PAN card, driving license, voter ID card, passport, etc.).
- LIC does not mandate you to provide your address proof.
The most important benefit of the personal loan against the LIC policy is that the interest rate is low. The interest rate is 9% whereas banks charge between 11% to 20%.
No Credit history
Another benefit of taking the loan against LIC policy is that credit score is not checked by the life LIC, which is always checked by the banking institutions. Therefore, no credit history is required in case of taking a loan against LIC policy. Banks check the credit score to get the information that the applicant is a loan defaulter or not.
No fixed repayments required
Unlike banking institutions which charge a fixed EMIs every month, loan against LIC policy does not require a person to pay fixed repayment amount every month. The principal amount to be paid is up to the borrower and also repayment options are very flexible.
No processing fee
There is no processing fee charged by LIC when you take a personal loan against LIC policy. Whereas, banks charge a processing fee for the personal loan.
No pre-closure charges
No pre-closure charges are charged by LIC, unlike the leading banking institutions which charge pre-closure charges for the personal loan.
If you are a LIC policyholder and you regularly pay your premiums, then it is a good option to take the personal loan against LIC policy whenever required. You can benefit from taking the personal loan from LIC because even if you are unable to pay the principal, there is an option of paying the interest amount.
For reading LIC guidelines for loans you can visit the official website