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Zero EMI, Zero Processing Fee, Low Interest Loan.. Full details for you..

ECONOMIC TIMES | November 4, 2024 10:59 AM CST

You have the option of repaying the loan whenever you have the money, without having to pay EMI every month for the loan you have taken.

At some point in everyone's life, there is a possibility of unexpected financial problems. To get out of it, we keep taking personal loan or borrowing from acquaintances on interest. A personal loan or a loan from someone we know will cost us a lot of interest. If you have a Life Insurance Policy (LIC) policy, you can get a loan at a very low interest rate.

A loan based on LIC policy is very convenient, you can repay the loan whenever you have money at your convenience without having to pay EMI every month. Loan taken on the basis of LIC policy comes under secured loan. The loan will be sanctioned to you on the amount of premium you have paid for your policy so far.

This loan requires very little documentation and is sanctioned in just 3 to 5 days. Also, there is no reduction in the benefits of your LIC policy as long as you take a loan. Another important advantage of this loan is that it does not have any processing fees or charges.

The tenure of the loan taken on the basis of LIC policy is at least 6 months till the maturity of the policy. If you repay the loan in full within 6 months, you will have to pay interest for 6 months. That is, if you take longer to pay off the loan in full, interest is added to the loan amount on a multiple annual basis.

Here you can repay the loan in 3 ways. First you pay the loan principal amount in full with interest, secondly you pay the interest every year and pay the principal amount differently, and finally thirdly you settle the principal amount along with the claim amount at the time of policy maturity. Here you have to pay only interest.

But here the policy holders also have to follow some rules. First of all, the loan is available only on traditional and endowment policies. Also, you can get 80 to 90 percent of your policy surrender value as a loan. And the interest rate depends on the profile of the policy holder. And if you fail to repay the loan or the outstanding amount is more than the surrender value of the policy, LIC has the right to cancel your policy. Also, if your policy matures before you pay off the loan in full, it will credit you with the remaining amount minus the loan amount.
You can apply for this loan online or offline. For offline you can go to your nearest LIC office and submit your KYC documents and apply for the loan. You can also apply online by logging into the LIC e-seva portal and entering your policy details.