Life Insurance Corporation (LIC) is India’s largest reputed insurance company, whose scope is spread from cities to villages. LIC provides many facilities to its policyholders including loan facilities.
If you have LIC policy then you can easily take loan. How much loan you will get on your LIC policy depends on your income profile. Let us tell you, the interest of LIC personal loan is very less as compared to other banks. At present, its interest rate starts from 9 percent and the loan tenure is up to 5 years.
The loan amount depends on the surrender value of the policy and can be availed up to 90%. Suppose if the surrender value of your policy is Rs 5 lakh, then you can get a loan of up to 4.5 lakh on it.
Its biggest feature is that if you pay before the loan tenure, the charges are zero. This means that if a creditor wants to repay the loan amount before the stipulated period, he will not have to pay any separate charges.
What percentage of interest is available on the loan
The interest on the loan starts from 9 percent. However, what will be the interest rate on LIC loan, it completely depends on the credit profile of the applicant.
In this profile, the income of the creditor, the type of employment he does, what will be the loan amount and the tenure of the loan matters.
The loan rate depends on all these factors.
How Interest rate is applicable
The interest rate on the loan is calculated using the flat rate or flat balance method. In this, interest is charged on the principal amount of the loan.
On the other hand, balance reduction method is used in which interest is charged on the outstanding amount of the loan. In this method, as the creditor repays the loan amount, interest accrues on the remaining loan amount as his principal amount decreases.
Suppose you took a loan of 5 lakhs and gradually repaid it to 2 lakhs, then interest will be charged only on that 2 lakhs. The person taking the loan gets benefit from the reduction method.
How much will the EMI
We can calculate EMI (LIC Loan Interest Rate) on the basis of-
If an individual has taken a loan of Rs 1 lakh at the rate of 9% and the tenure is fixed for 1 year, an EMI of Rs 8,745 will be applicable.
If taken for 2 years, the EMI of Rs 4,568 will be there.
If taken for 3 years, the EMI of Rs 3,180 will be there.
If taken for 4 years, the EMI of Rs 2,489 will be there.
If taken for 5 years, there will be an EMI of 2,076.
Similarly, if you have taken a loan of 5 lakhs, then the EMI of Rs 44,191 will be on the 1-year loan.
There will be an EMI of 23,304 on the 2 year loan.
There will be an EMI of Rs 18,472 on a 3-year loan.
How to take a loan
You can visit LIC’s website to avail loan.
Visit LIC Official website, whereyou can apply for a loan.
Fill out the form through this link and enter the requested information. After filling the online form, download it.
Take a print out of this form and after signing it, scan it and upload it on the LIC website. After doing this the loan application will be completed.
Thereafter, LIC will verify your application and initiate the loan disbursement process.
After the process is completed, the loan amount will be transferred to your bank account online.