Loan Against LIC Policy Eligibility

With quick disbursal and easy documentation, LIC personal loans come in handy for a variety of purposes.  At LIC Housing Finance, you can avail minimum loan of Rs.50,000  and maximum of 95% of the surrender value of the LIC policy or face value of liquid security. Customers can avail this loan against fixed deposits of nationalized banks, life insurance policies which have surrender value and post office instruments like National Savings Certificate, Kisan Vikas Patra and others.

LIC Personal Loan Eligibility Criteria

Life Insurance Corporation of India gives a loan to an LIC endowment policyholder as per the terms and conditions of the insurance policy. There are, however, a few requirements and conditions that should be met in order to avail a personal loan related:

• The insurance policy against which the loan is being taken should be assigned to LIC, i.e. the policyholder or borrower has to transfer all of his or her rights, title and interest to LIC.
• The terms and conditions of the loan are based on the information given in the policy bond document – application of the loan must be made accordingly.
• All LIC life insurance policies do not have a loan facility. Therefore, the policyholder should carefully go through the terms and conditions of his or her policy to check whether it qualifies as a security for a personal loan from LIC or not.
• The interest on the personal loan has to be paid semi-annually. The rate of interest on the loan is declared by LIC every year. It is important to note that the personal loan interest rate on offer is plan specific.
• The maximum loan amount that can be obtained against LIC policy equals 95% of its surrender value (85% in case of paid up policies) including the bonus.
• A personal loan against an LIC policy is granted for a minimum period of six months. If the policyholder wants to repay the loan within this time frame, he or she will still have to pay interest for the entire six month period.
• In the event of claim due to death or maturity of the policy within six months from the date when the personal loan was availed, interest will have to be payable till the date of death or policy maturity. Subsequently, payout will be made after deducting the loan principal and interest from the policy proceeds.

Eligibility for LIC Personal Loan Foreclosure 

LIC personal loan borrowers are eligible to foreclose i.e. prepay the loan in full ahead of schedule subject to the following criteria:

• A minimum of six months’ worth of interest needs to be paid at the time of foreclosure, even if the foreclosure is completed before completion of six months from the date of loan disbursal.
• Foreclosure charges (if any) are specified in the loan agreement and may differ from one applicant to another as per criteria specified by the lender.

Eligibility for LIC Personal Loan Top-up

Currently, this facility is not offered by LIC as the loan quantum offered is up to 95% of the surrender value of the policy/liquid value of the collateral used (KVP, NPS, shares, etc.). While this facility may be offered to select borrowers at a later date, the terms and conditions related to this loan are expected to vary based on policy type and other factors related to the individual borrower profile.   

How to Improve your LIC Personal Loan Eligibility

Following are the important points that need to be considered to improve your LIC Personal Loan eligibility:

1. Maintain a good credit score: In order to avail personal loan, one of the most important things is to maintain a good credit score. It is a three digit code which ranges from 300 to 900. An ideal score to avail personal loan should be closer to the mark of 900. Credit score determines the credit worthiness of the customer. Therefore, it is said, higher the credit score more is the change of loan approval.
2. Pay your EMIs/credit card bills in a timely manner: Make sure your pay your loan EMIs and credit card dues in a timely manner. This not only improves your credit score, but also makes you eligible to avail new credit cards/loans in the future.
3. Focus on reducing your existing debts: It is advised that if you have any existing debts in the form of unpaid credits or outstanding personal loans, you should focus on reducing the same. This helps in increasing your debt-to-income ratio and makes you eligible for new loan.

FAQs

Q1. Where can I find the nearest branch of LIC?

You can find the list if your nearest LIC branches on the official website.

Q2. How loan it takes to get personal approved by LIC?

Once your loan gets approved, the loan amount usually gets disbursed in 3-4 working days.

Q3. How do I get in touch with customer care of LIC?

You can call the LIC call center at 02268276827 with any and all queries related to your insurance policy.

Q4. How can I purchase LIC personal loan?

You need to visit the official website of LIC Housing Finance and apply for personal loan.

Q5. How to check my LIC Personal Loan eligibility online?

You have to log into your online LIC account and check for the loans tab. If your existing policy/policies are eligible for a personal loan against LIC policy, the loan option(s) will show up in your account.