Until sometime for availing loan against your LIC policy, you were required to visit your service branch and complete the documentation task to let the insurer fund your financing needs. But now, you can apply for loan against your LIC policy online in few easy to follow steps. So, before you choose LIC for this, let us know some of the facts concerning loan against LIC policy listed here forth:
For you to be eligible to avail loan against your LIC policy, you should have paid premiums towards it for atleast 3 years. Term insurance policies are not eligible for loans.
LIC disburses some maximum amount against your LIC policy which equals 90% of the surrender value or 85% in case of paid up policies including the bonus amount.
Interest on the loan is payable on a half-yearly basis. Also, you need to hypothecate your policy bond with the insurer as security.
Procedure to make online application for loan against LIC policy
Not only application for loan but also repayment of principal and interest amount can be made through the online route. Here is detailed the step-by-step procedure to apply for loan online:
1. Visit the website of LIC. On the home page, under the online services menu, click on the 'Online Loan' tab.
2. Then you are directed to a new page with two options; one for the repayment of loan or loan interest payment and another for making a fresh loan application through customer login. As a premier service, the facility is available only to registered customers.
3. Also, you need to update your bank account with the insurer such that it can auto-credit the loan amount in your bank account.
With this added convenience to apply for loan online, loan from LIC against your policy is a good financing option in case of emergency as it is available at a cheaper rate of interest in comparison to other loans as well as offers the flexibility to repay only interest amount if desired and the principal amount can be settled from the claim amount at maturity. Also, only the policy bond is to be pledged with the corporation and here in your credit score does not comes into play.