Taking of loan on a LIC policy is the fastest way to get a loan without absolutely no paperwork. A client of mine had a minor financial set back and was in dire need of a loan. So he called me and asked me to surrender a few of his LIC policies. Instead of surrendering the policies, I suggested to him that he could take a loan against the policies and pay it back as per his convenience. Not to mention his requirement was for a short term only, 8-10 months on his 8 policies that he had for almost 8 years, I got him a loan of 15 lakhs.
Want to apply for loan online? Fill out the form below
LIC Loan Details – 2021
First time applying for loan on policy? Here are all the details about the loan
|Interest Rate||8% to 11%|
|Eligibility||Endowment policies that ave completed 2 years|
|Fore closure charges||NIL|
|Minimum tenure||6 months|
In case of any emergency the policy premiums and the interest, bonus accumulated thereon can be taken as loan with not much documentation and almost instantly. LIC loan on policy can be very useful in emergency situations where you need money for something instant and for short duration.
Eligibility for LIC Policy Loan
All LIC policy holders are eligible to take loan against their policy provided they have paid minimum of 3 yearly premiums. LIC loan on policy eligibility mainly depends on the premiums you have paid.
Want to know if you are eligible for taking a loan on your policy? Check your loan eligibility and the amount that can be taken as loan here.
Process to apply for loan
You can apply for loan online at LIC of India official website. The process is very simple, fast and without any hassles. The process for LIC loan online is available for both registered and unregistered users. You can apply for loan through you LIC agent or do it yourself online or by visiting a LIC branch.
Process to apply for loan at LIC branch
Steps to apply for loan
- Visit any LIC branch. Search LIC branch by code.
- Mention you policy number to check eligibility
- Fill out LIC loan form No. 5198 (download loan form)
- Submit at branch
- Loan will be sent to your bank account (as in your policy) in less than 7 days.
Process to apply for loan at LIC website
Steps to apply for LIC loan online on LIC website (https://www.licindia.in)
- Create your login account on the site. You ill need to have your policy number with you and date of birth, email id and mobile number as on your policy. If your mobile and email id are not mentioned in your policy, you will have to get that done first
- Login to your LIC account
- The tab Loan will show you the LOAN amount that can be availed by you
- Click apply for loan
- Loan will be sent to your bank account (as in your policy) in 2 days
Documents required for LIC loans
You would have to submit the following documents to avail LIC loans –
- Your policy bond in original
- An application for availing a loan on LIC policy
- An assignment deed through which you assign the loan in the name of LIC
- Your identity proof
- Your address proof
- Your income proof
LIC Loan on Policy vs Other Personal Loan
Loan against LIC policy has various benefits over other types of loans. These benefits include the following:
No processing fee
No hidden charges
Easy application process
Longer repayment periods
No requirement of your credit score
Important things to know before taking loan on LIC policy
- The interest rates of policy loan changes as per market scenario. Do check the current interest rates before taking a loan
- If you cannot pay the loan back. The principal and the interest amount can be adjusted against your final maturity pay out or bonuses or both.
- There are no prepayment charges
- The status of your policy should be active.
LIC Loan Payment
The interest can be paid every month online at LIC website or any LIC branch. If you need to pay back the principal amount as well. You need to fill out a loan closure application. There is no prepayment charges for loan.
LIC Loan Interest
What is LIC loan against policy?
Since any life insurance policy is a long term investment commitment and due to some financial emergencies a policy holder may need some amount in between the policy term. Though he can always surrender the policy and take out the money and use it. In such case the policy holder not only misses out on the future bonus declarations but is no longer having a life cover.
LIC of India is giving out an option to the policy holder to take out money from his policy even before the policy is completed. LIC loan can be availed against the policy by the policy holder to take care of his temporary financial needs.
After how many years can I take a loan on my policy?
|Name of the policy||When is LIC loan available|
|Jeevan Pragati||After three full years’ premiums have been paid.|
|Jeevan Labh||After three full years’ premiums have been paid.|
|Single Premium Endowment Plan||After the end of first policy year|
|New Endowment Plan||After three full years’ premiums have been paid.|
|New Jeevan Anand||After three full years’ premiums have been paid.|
|Jeevan Rakshak||After three full years’ premiums have been paid.|
|Limited Premium Endowment Plan||After three full years’ premiums have been paid.|
|Jeevan Lakshya||After three full years’ premiums have been paid.|
|Aadhar Shila||After three full years’ premiums have been paid.|
|Aadhar Stambh||After three full years’ premiums have been paid.|
|Jeevan Umang||After three full years’ premiums have been paid.|
|Bima Shree||After two full years’ premiums have been paid.|
|Jeevan Shiromani||After the end of the first policy year|
|New Money Back Plan – 20 years||After three full years’ premiums have been paid.|
|New Money Back Plan – 25 years||After three full years’ premiums have been paid.|
|New Bima Bachat||After the end of the first policy year|
|New Children’s Money Back Plan||After three full years’ premiums have been paid.|
|Jeevan Tarun||If Premium Paying Term is less than 10 years – After two full years’ premiums have been paid.|
If Premium Paying Term is 10 years or more – After three full years’ premiums have been paid
How much loan can be taken against a LIC policy?
Almost all LIC policies have the built in facility of getting a loan against the policy. from LIC of India. Policy holder can avail the loan facility on policies after completion of two 2 years of policy. The loan eligibility differ from plan to plan. Usually the loan can be availed for up to 80 percent of your total premiums paid and bonuses added.
Is here any interest on the loan against policies
Yes, you need to pay interest on the LIC loan taken on the policy at prevailing market rates. The interest rates keep changing from time to time but is always lesser than any other personal loan options. The current interest rate on loan against LIC policy is 10.50% -22.00%.
How to download LIC loan statement
The loan statement an be downloaded online from LIC India’s official site. If at anytime you need to see the balance on you loan, you ca do that without visiting any LIC office or calling the customer services. The entire process to see the latest loan statement is online. The statement will give you all the details about the loan including the initial loan amount, interest paid, remaining balance and the details of the payments made by you for interest. You can visit the official site to check the latest loan status.
How do I take Loan against LIC policy?
What is the eligibility criteria? How much is the interest rate? Do I have to return the loan? loan on. lic policy application form. how to apply. What is the procedure? Calculator? How to return? How much loan can I get against my LIC policy? Loan against LIC policy interest rates? Loan against LIC policy bond.
ULIP and Term insurance policies do not have any loan availability. People who have taken a term insurance cannot take a loan against their LIC policy from LIC of India. Same is the case with the people who have ULPIs (unit linked insurance plans, like Future Plus, Market Plus, etc.)