Need funds for an emergency but getting a personal loan from a bank seems very expensive? You can now avail a personal loan against your Life Insurance Corporation (LIC) policy at a lower rate of interest as compared to many banks. This is a great way to get a personal loan, where your LIC policy is taken as security for the loan. The interest rate for such loans starts from 9% and the duration of the loan is 5 years. Moreover, if you repay your personal loan in advance, you get an exemption from extra charges.
Let’s learn about the eligibility criteria to avail a personal loan against your LIC policy and the application process for the loan.
Eligibility Criteria To Apply For A Loan From LIC
To apply for a personal loan against your LIC policy, you must fulfil the following criteria:
You must be at least 18 years old.
You must apply for the loan against a valid LIC policy that is under your own name.
The LIC policy used to apply for the personal loan must have a guaranteed surrender .
The premiums of the LIC policy for at least 3 years must be fully paid.
Features Of A Personal Loan Against A LIC Policy
Here are the key features of personal loans from LIC:
The rate of interest on the personal loan will be determined as per the applicant's profile.
Only holders of a LIC endowment policy can apply for such loans.
The amount of the personal loan is an advance on the LIC policy’s surrender . The maximum borrowing amount is 90% of the policy’s .
LIC will hold the policy as a security for the loan. The policy can be withheld in case the loan applicant does not repay the loan.
LIC can terminate the applicant’s policy if the personal loan debt exceeds the surrender of the policy.
If the LIC policy matures before the complete repayment of the personal loan amount, the pending amount will be deducted from the policy’s maturity amount.
Documents Required To Apply For A Personal Loan From LIC
You must keep the following documents ready before applying for a personal loan against your LIC policy:
Loan application form
Two passport-size photos
Original LIC policy document
Personal identification documents: Aadhaar card, passport, voter ID card, etc.
Address proof: Aadhaar card, voter ID card, driver's licence, etc.
Proof of income: salary slip, bank statement
Process To Apply For A Personal Loan From LIC
Here is the offline process to apply for a personal loan against your LIC policy:
Visit your nearest LIC office.
Fill out the personal loan application form.
Submit all the necessary KYC documents along with the original LIC policy document.
LIC will verify the details of the application and then a personal loan of up to 90% of the policy’s surrender will be granted.
Here is the online process to apply for a personal loan against your LIC policy:
Visit the official LIC website at www.licindia.in.
Move to the ‘Policy Loan Options' page.
Now, click on the 'Through Customer Portal' option.
You will be redirected to a new page. Here, log in to your LIC e-services account using your user ID, date of birth, and password.
Select the LIC policy against which you want to apply for the loan.
Download the loan application form, fill in all the details, scan the duly filled form and upload it.
LIC will verify the details of the application and then grant the personal loan if the application is approved.
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