People often resort to personal loans or credit cards for money in emergencies. However, the amount available from the credit card is limited and the interest is very high. At the same time, the interest rates in personal loans are also high and the EMI burden remains every month. But there is an option, which is not only cheaper than personal loan but also does not have the hassle of EMI. This is a loan on LIC policy.

Special facility for LIC policy holders

If you have an insurance policy of LIC, then you can take a loan on it. It is very easy to take this loan, it does not require many documents and usually the loan amount is received within 3 to 5 days.

What is the biggest feature of this loan?

The best thing about this loan is that you don't need to pay EMI every month. You can repay this loan as per your convenience. The loan period can be from 6 months to the maturity of the policy. In this way, you can repay the loan whenever you want, just keep in mind that the interest will continue to accrue every year.

Interest rates and costs are lower than personal loans

LIC loans are much cheaper than personal loans. The interest rate on LIC loans ranges from 9% to 11%, while on personal loans the rate can range from 10.30% to 16.99%. Apart from this, there are no processing fees or hidden charges on LIC loans, which reduces your total loan cost.

3 easy ways to repay the loan

You can repay this loan in three ways:

1. Repay both interest and principal together.
2. Paying interest only and settling the principal from the claim amount at the time of maturity of the policy.
3. Paying interest every year and settling the principal separately at some other time.

How much money can you get?

The loan available on LIC policy is determined on the basis of surrender value. Usually 80% to 90% of the surrender value of the policy is loaned. This loan is secured, that is, the insurance company holds the mortgage of your policy. If you fail to repay the loan, the company has the right to terminate the policy.

Both online and offline options available

For the loan, you can apply offline by visiting the LIC office or you can also apply online. For online application you have to register in LIC's e-service. Then log-in to check the loan eligibility on your policy, read the terms and interest rates and apply. After that upload your KYC document online.

Why is this loan better than a personal loan?

• Low interest rate
• No EMI
• No processing fee
• The insurance benefit does not go away from the mortgaged policy
• Repayment as per your convenience
• Quick approval and less paperwork

PC:Punjab Kesari