Life Insurance Corporation (LIC) is India’s largest reputable insurance company. He has several regimes and policies for the people. These policyholders receive various offers under the policies, including a loan facility. If you have an LIC policy, you can easily take out a personal loan. Its interest rate is much lower than that of public or private banks. LIC’s interest rate on personal loans starts at 9%.
As much to say it to you, the interest of the personal loan of LIC is much lower than that of the other banks. Right now, its interest rate starts at 9% and the loan term is 5 years. The loan amount depends on the cash value of the policy and can be used up to 90%. Suppose if your policy’s cash surrender value is Rs 5 lakh, then you can get a loan of up to 4.5 lakh on it. Its main feature is that if you pay before the term of the loan, the fees are zero. This means that if a creditor wishes to repay the loan amount before the stipulated period, he will not have to pay a separate fee. This is called the fee charged in the event of premature termination.
The LIC personal loan is available at 9% interest
Interest on the loan starts from 9 percent. However, what will be the interest rate on the LIC personal loan, it will depend entirely on the credit profile of the applicant. In this profile, the creditor’s income, the type of job they hold, what the loan amount will be and the loan repayment period will all count. The rate of the loan will depend on all of these factors.
Interest on the LIC personal loan will be deducted
The interest rate on the loan is calculated using the flat rate or lump sum method. In this case, interest is charged on the principal amount of the loan. On the other hand, the balance reduction method is used in which interest is charged on the outstanding loan amount. In this method, as the creditor repays the loan amount, interest accrues on the remaining loan amount as its principal amount decreases. Suppose you take a loan of 5 lakhs and gradually repay it at 2 lakhs, then interest will only be charged on those 2 lakhs. The person who takes out the loan benefits from the reduction method.
Here is how much EMI you will have to pay for the LIC personal loan
On this basis, we can calculate EMI (LIC Personal Loan Interest Rate). If an individual has taken out a loan of Rs 1 lakh at 9% and the term is set at 1 year, then an EMI of Rs 8,745 will apply. If the loan is for 2 years, the EMI will be Rs 4,568. There will be an EMI of Rs 3,180 on the loan for 3 years. If the loan is for 4 years then the EMI of Rs 2,489 will be there. If the loan is for 5 years, then there will be an IME of 2,076.
Likewise, if you have taken out a personal loan of 5 lakhs, then the IME of Rs 44,191 will be on the one year loan. The term of the 2 year loan will have an IME of 23,304. The EMI on the loan with a term of 3 years will be Rs 18,472. Rs 12,917 on loan with EMI of Rs 15,000 for 4 years and 5-year term.
How to apply for a LIC personal loan
To apply for the LIC personal loan, visit the official LIC website (Click here for the direct link).
- Once the home page opens on your computer screen, click on “Online Loan” under the online service (this is on the left side).
- When you click on “Online Loan”, it will take you to a new page, where you will find two options namely loan repayment and loan application online.
- You must now log in with your client ID, password and date of birth.
- You need to link your bank account number to your policy number so that the loan amount is automatically credited to the bank account.