Loan without EMI, no processing fees, and no hidden charges, half of India may not have even heard about it

If you take a loan from a bank, then first you have to pay processing fees and some hidden charges. Also, after getting the loan, EMI has to be paid every month. But if you are told that you can get a loan in which there is neither the hassle of paying EMI every month nor processing fees and some hidden charges, then you will probably be surprised. Not only this, this loan can also be cheaper than a personal loan. If you ever need money in an emergency, then you can arrange money for yourself through this loan. Know about this loan here.

We are talking about the loan available on LIC policy. Just like the facility of loan is available on bank FD, similarly the facility of taking loan is also available on all the policies of LIC. This loan comes under the category of secured loan because the loan guarantee is your life insurance policy.

Like a personal loan, this loan is also not very hasslesome. It does not require much paperwork. The customer can get the loan amount in just 3 to 5 days.

One advantage of a loan on LIC is that you do not have to surrender your policy. In this case, the benefits you get from insurance do not end. This loan is cheaper than a personal loan, and there are no processing fees or hidden charges while taking it. In this case, there is a saving on the additional costs of the loan.

There is a good amount of time to repay the loan taken on LIC policy because the loan period can be from a minimum of six months to the maturity of the insurance policy. Usually LIC policies are of a long duration, so the person gets a lot of time.

Its repayment is quite easy. The customer does not have the tension of paying EMI every month. As the money accumulates, you can pay accordingly. But one thing to keep in mind is that annual interest will keep getting added to it. If a customer settles the loan within the minimum period of 6 months, then he has to pay interest for the entire period of 6 months.

The loan can be repaid in 3 ways. First- Repay the loan by paying the entire principal amount along with interest in lump sum. Second- Settle the principal amount along with the claim amount at the time of maturity of the insurance policy. In this case, now you will have to pay only the interest amount. Third- Pay the annual interest amount and repay the principal amount as per your convenience.

The loan amount is decided according to the surrender value. You can get a loan of up to 80 to 90 percent of the surrender value of the policy. The interest rate of the loan policy depends on the profile of the policy holder. Usually, it ranges from 10 to 12 percent.

While giving loan on the policy, the insurance company keeps your policy mortgaged. In such a case, if the loan is not repaid or the outstanding loan amount exceeds the surrender value of the policy, the company has the right to terminate your policy. If your insurance policy matures before the loan is repaid, the insurance company can deduct the loan amount from your amount.

You can apply both online and offline to get a loan against the policy. For offline, you will have to go to the LIC office and apply for the loan with KYC documents.

To apply online, register for LIC e-services. After this, log in to your account. After this, check whether you are eligible to get a loan to replace the insurance policy or not. If yes, then read the loan terms, conditions, interest rates, etc. carefully. After this, apply and upload the KYC documents online.