LIC policy holders can avail loan against LIC policy by pledging their policy as collateral for loan amount of up to 90% of the policy’s surrender value. The interest rates are usually lower than the personal loan interest rates. The loan process is completely digital with minimal documentation required. You can consider opting for this loan under the following circumstances:
Loan Against LIC Policy

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What is an LIC Loan?
Interest Rates for Loan Against LIC Policy
| Lenders | Interest Rate (p.a.) |
|---|---|
| HDFC Bank | 10.75% onwards |
| Axis Bank | 11.50% onwards |
| State Bank of India | 11.20% |
| ICICI Bank | 10.75% - 11.75% |
| IDFC FIRST Bank | 9.50% |
Note: Interest rates may vary for different policies across lenders. Confirm the exact rates with the lender before applying.
Maximum Loan Amount for LIC Loan
The loan amount for an LIC policy depends on the borrower’s profile, lender’s policies and insurance policy’s value. Loan against LIC policy is offered for a loan amount of up to 90% of the policy’s surrender value. The ongoing policies (90%) have a higher percentage of surrender value as compared to the paid-up policies (85%).
Eligibility for LIC Loan
| Eligibility criteria | Details |
|---|---|
| Nationality | Indian citizen |
| Applicant’s age | Minimum 18 years |
| Eligible plans | Jeevan Pragati, Jeevan Labh, New Endowment Plan, Jeevan Rakshak, Jeevan Lakshya |
| Minimum premium payment | 3 years’ premium in full |
| Surrender value requirement | The policy should have a guaranteed surrender value |
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Documents Required
Below-mentioned are the documents required during a LIC loan application:
Also Check: Documents Requirements for Personal Loan
LIC Loan Repayment
Benefits of Taking Loan Against LIC Policy
Below-mentioned are the benefits of taking a loan against an LIC policy:
Disadvantages of Taking Loan Against LIC Policy
Below-mentioned are the disadvantages of taking a loan against an LIC policy:
Loan Against LIC Policy v/s Personal Loan
| Loan Against LIC Policy | Personal Loan |
|---|---|
| Secured loans | Unsecured loan |
| Lower interest rates | Comparatively higher interest rates |
| Loan amount offered up to 90% of the policy’s surrender value | Loan amount depends on the repayment capacity of the applicant |
| The process is faster with flexible repayment options | The process might take a little longer with monthly repayment options |
| The loan is offered to individuals with a poor credit score | Applicants should have a high credit score, preferably 760 or above, to get their loans approved |
LIC Policies Eligible for Loan Against LIC Policy
Below-mentioned are the eligible policies for LIC loan:
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Personal Loan Articles
View All ArticlesPaisabazaar is a loan aggregator and is authorized to provide services on behalf of its partners.
The APR (Annual Percentage Rate) of a personal loan is its annualised cost of borrowing, which includes the interest rate as well as the processing fees, documentation fees and other fees charged during the loan origination. The APR is expressed in the form of a percentage and thus, allows personal loan applicants to detect personal loan schemes offered at lower interest rates but with higher processing fees and/or other charges.
The APR of personal loans usually ranges between 11.29% to 35%. For example, assume that you have availed a personal loan of Rs. 5 lakhs @ 10.50% p.a. with a repayment tenure of 5 years. The processing fee charged for this loan is 1.5% of the loan amount, which amounts to Rs 7,500. Therefore, the total borrowing cost of your personal loan will be Rs 1,52,317 and its APR will be 11.16%.
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