•  Loading your search... Loading your search...
  • Loan Against LIC Policy is Rated as "Great!" by 92205 Users

    Fees & Charges

    Promised Interest Rate

    Customer Service

    Responsiveness

    Personal Loan BYTES FROM OUR KITCHEN
    rated 4.0/5.0 by 92205 users

    Loan Against LIC Policy

    Besides being one of the most sought out options, for life insurance for Indian citizens, Life Insurance Corporation policy allows you to get personal loans against it for meeting your immediate needs. A lot of people are not aware of this advantage because of the lack of publicity of this option from the LIC policy.

    It is easier to get a loans against your LIC policy as they come at cheaper interest rates. However, they are only good for Personal Loan needs as there are restrictions in terms of the amount that can be borrowed even as a member of the policy. Note that for submission of loans only the endowment policies are applicable.

    How much can be Borrowed on your LIC Policy?

    The Cash Value is the term that needs to be noted, which is also known as the Surrender Value of the policy as well. Prior to applying for the loan it is essential to know the exact cash value of your policy as, in the case that it is very less it is useless applying for the personal finance option unless it is a huge amount.

    The Surrender or Cash Value

    The cash or surrender value is basically the amount payable to the policyholder in the case he or she decides to discontinue the policy and encash the same from LIC. This amount is only payable after three full years premiums have been paid to their LIC policy. Also, in case it is a participating policy, the Bonus amount is automatically attached to the amount as per rules of LIC. The surrendering of an LIC is not a good idea considering that the value is always considerably low. However, it means that the loans that you can avail against this amount from LIC will also always be comparatively low.

    Eligibility Criteria for Availing the Loan against your LIC Policy

    Here are some of the main eligibility criteria’s, if you wish to avail a loan against LIC policy:

    • He or she must be an Indian citizen or residing in India.
    • He or she should own an LIC policy.
    • The applicant also must have paid three years of complete premiums before applying for the loan.
    • He or she should be at least 18 years of age.
    • The maximum loan amount available under the policy is 90% of the Surrender Value of the policy. In Case of paid up policies 85% of the surrender value and cash value of bonus is the maximum that can be loaned in.
    Apply for Personal Loan

    What is The Rate of Interest Applicable for Availing a Loan against LIC Policy?

    Loan against LIC Policy

    The rate of the interest applicable on the loan is 9% and the minimum period loan is given if for 6 months.

    Features and Benefits of Loan on LIC Policy

    The following are the features, including the benefits of availing a loan against your LIC policy:

    • The loan against your LIC policy is an advance made against the cash value or surrender value of the policy.
    • The advance is always less than the case value.
    • Most of the insurers approve 90% of the cash value of the policy.
    • In case a loan is given, the policy is absolutely assigned and held by Life Insurance Corporation of India as security for repayment of the loan.
    • You have to pay the interest specified in the loan, which in the case of an LIC policy is generally 9%.
    • If the individual fails to pay the interest by the due date, the amount will be added to the principle and the interest will be calculated again.
    • If the total amount of debt is more than the surrender value, LIC takes the leverage of terminating the policy.
    • If the policy matures prior completion of loan repayment, LIC also has the rights to deduct the loan amount from the maturity amount.

    Alternatives of Personal Finance besides Loan against LIC Policy

    There are other options for availing personal finance, other than loan against your LIC policy:

    1. Independent personal loans from banks and financial institutions, with higher rate of interest but more features, lesser restrictions of loan amount and more benefits.
    2. Personal Loan against Credit Card, which are more viable as an option in terms of lower interest rates and the repayment can be made through the monthly credit card bill cycle through EMIs. Again lesser restrictions.
    3. Other Life insurance providers also offer loan against their life insurance products although it is suggested not to take a loan against a ULIP as it has some risk factors involved.

    Loans against LIC Policy FAQs

    What is the amount of loan one can avail against an LIC Policy?

    The amount of loan sanctioned can be only till a maximum of 90% of the policys surrender value. The surrender value is achieved after payment of 3 years of premium in full, so the loan can be availed only after that.

    What is the minimum time within which the loan can be repaid?

    The minimum time allowed for repayment is six months. Even if the principal is settled off within two or three months, the interest for the period of six months will have to be paid.

    What if the policy matures or is claimed within the loan repayment period?

    In case the policy matures or is claimed within the repayment period, interest will be charged only till the maturity or claim date, appropriate principal and interest will be deducted and the balance will be paid out to the policyholder or the nominee, as the case may be.

    Can multiple loans be taken against a single LIC Policy?

    Yes, even if the interest on the first loan hasnt been paid, a second loan can be allowed from LIC, provided the policy is of an increasing cover type that increases annually. No reason needs to be offered for this loan as well.

    What is the rate of interest and how frequently is it calculated?

    The current rate of interest (as of December 2015) is 10% per annum which is the lowest that one can get in the market as far as personal loans are concerned. The interest is calculated semi-annually, so twice in a year.

    What is repayment structure or EMI scheme?

    There is no particular EMI structure and the principal can be paid in as less or as more amounts as possible. Lessening principal will effectively lessen the interest amount that needs to be paid.

    Can this facility be availed online?

    No, as of yet, the facility can be availed only by physically visiting the branch where one has availed the policy and the loan from. Repayments also have to be done through physical visits.

    Loan Against LIC Policy Reviews

    • ICICI Bank Personal Loan
      "Need to reduce charges"
      0.5 4.0/5 "Great!"
      I have taken a personal loan with ICICI bank and the experience was good, the loan amount was for Rs 2 lakhs with high interest rate of 15.5%. The process was quick and i received my loan amount on time. I paid Rs 12000 for insurance and the tenure period for this loan is 48 months.
      Was this review helpful? 0
      , coimbatore
      Reviewed on Jun 19, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      It has been a very good experience with them and the process in getting the loan has been very good. The security with them had been good and i am satisfied with the loan amount which they had provided. The interest rate has been good with them and the whole process had been good. It has been almost two to three months since i have taken the loan.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 19, 2018
    • Axis Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a good process in getting this loan and i am satisfied with the loan amount which have been provided by them, The interest rate with them had been good as well as the process has taken less time and there has not been any issues so far.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 19, 2018
    • ICICI Bank Personal Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a very good experience with this loan and the loan amount which they had provided had been satisfactory as well. The interest rate with them has been quite good compared with the market rate. The whole process had been pretty smooth and easy where it has taken very less time in getting the loan amount.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have a good experience dealing with this on line tool. I received good customer service and response as when I applied for the product on their website. They have an user website where we can navigate through everything hence it was easy to choose. I am very much satisfied with their services.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • Tata capital Personal Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have taken a personal loan from Tata Capital, it was a good choice that I have made, the processing my loan amount at the earliest it was not delayed, the customer service was also good, they assisted me well. The rate of interest they have charged is also quite OK as compared to others.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good"
      0.5 4.0/5 "Great!"
      The services I received from this on line tool was good, they have many options to choose the financial product from their website, it was good and hassle free, I received good customer service who helped me and assisted me in processing my application and documents, I was quite happy with the services they have provided.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 19, 2018
    • IndusInd Bank Personal Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have taken a personal loan from IndusInd bank, the services were quite good, I got good assistance in processing my loan application, but however the loan process was delayed a bit with documentation other than that there is no issue. Even the rate of interest was good enough.
      Was this review helpful? 0
      , chennai
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good"
      0.5 4.5/5 "Excellent!"
      My experience that I had with this on line portal has been good n terms of services and the processing they did. I received proper communication for the product I have chosen and it went smoothly. But my only complain is that I get repeated calls in same day for same queries, if they could do some proper management for that and improve on that aspect it would be great.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 19, 2018
    • IndusInd Bank Personal Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have taken a personal loan from IndusInd bank, everything was OK, except the rate of interest they have charged which I believe is a bit high as compared to others. They have charged me around 15.5 % for loan amount of Rs. 5,00,000 for 4 years. Rest assured I received the amount on time everything was smooth I am happy.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good"
      0.5 4.5/5 "Excellent!"
      I have a good experience with this on line tool, the services I have got has been good. The good part about their services is reaching out to customer service is very easy, you don't have to go through any IVR and they are directly approachable for your quick queries. I am quite satisfied.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 19, 2018
    • Tata capital Personal Loan
      "Average"
      0.5 3.5/5 "Pretty good"
      My experience of personal loan with Tata Capital has been some what OK as I received the loan amount on time and I was aware about the rate of interest they have charged, however there was no annual fees but there was an insurance fee that they have charged which I came to know in mid process I was not quite happy about that.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jun 19, 2018
    • Standard Chartered Bank Personal Loan
      "Wonderful"
      0.5 4.0/5 "Great!"
      Rate of interest is around 11.49% for the personal loan with the Standard Chartered bank. Customer service is good too with the Standard Chartered bank. Everything is better one with them till now. All of the aspects are better one with the Standard chartered bank.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Best"
      0.5 4.0/5 "Great!"
      Bankbazaar.com is good one and am using it from the February onward. I would like to say that the customer service is good one and the response is also good too. I am happy with the Bankbazaar.com till now.
      Was this review helpful? 0
      , visakhapatnam
      Reviewed on Jun 19, 2018
    • HDFC Bank Personal Loan
      "Best"
      0.5 4.0/5 "Great!"
      Interest rate is around 17.5% for the personal loan with the HDFC bank. I would like to say that the response is good one for me with them and the processing charges are on higher end like its around 7000 Rupees.
      Was this review helpful? 0
      , visakhapatnam
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Wonderful"
      0.5 4.5/5 "Excellent!"
      I am using Bankbazaar.com from the last three years of time. All of the financial products, I used to get it through them. Everything is an excellent one for me with them as such. I have never faced any such issues with them till now.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • HDFC Bank Personal Loan
      "Wonderful"
      0.5 4.0/5 "Great!"
      Rate of interest is around 11% for the personal loan with the HDFC bank. I would like to say that the processing charges are on higher end. Apart from that everything is good one with the HDFC bank for the personal loan.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good "
      0.5 4.0/5 "Great!"
      Bankbazaar.com is good one and am using it from the last two months of time. I would like to say that the customer service is good one with the Bankbazaar.com. I am really happy with the Bankbazaar.com till now.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 19, 2018
    • ICICI Bank Personal Loan
      "Okay"
      0.5 4.0/5 "Great!"
      10.99% is the rate of interest for the personal loan with the ICICI bank. I would like to say that the response is good one with the ICICI bank. Everything is better one for me with the ICICI bank, also am really happy with them till now.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jun 19, 2018
    • Bank Bazaar Personal Loan
      "Good "
      0.5 3.0/5 "Satisfactory"
      I am using Bankbazaar.com from the last one year of time. I would like to say that the customer service is good one with them and the online portal is easy to access. Everything is better one for me with the Bankbazaar.com.
      Was this review helpful? 0
      , pune
      Reviewed on Jun 19, 2018
    Common Loader Icon
  • reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.