Loan against insurance policy
This is one sure way of raising money in an emergency, if you have a permanent life insurance. It simply means for one to borrow from his or her life insurance policy. In open ended loans you will be able to take loans many times. You may pay the loan amount and take the loan again. You’ve the credit limit for such loans. It means you can’t take any loan against amount fixed by the lender. You will have to pay some interest on such loans if you exceed your credit limit or pay after your date of maturity.
Credit limit will be increased by lender in case you have good record and don’t default in the payments. The lines of credit and credit cards are the good example of such type of loans. This type of loan is still not very popular in India but the trend is coming up and soon this is going to become very common this is a very popular way to get loan all over the world.
In India, there are a wide range of loans you can take. But, many people despite of having different type of assets to go for the personal loan even though they have many other choices where they may mortgage their current asset and take loan at lower rate of interest. It happens because most of us do not know about various loan options that are available. Loan is an amount of money that borrower takes from a lender with an assurance promise of returning the money back within the fixed time frame. Rate of interest will be fixe by banks for various loans like applied by a borrower. Then borrower pays back their interest and money in the installments as per agreement between both of them. In India, banks offer many different kinds of loans for help.
how much can you borrow from your life insurance policy?
You can borrow only from permanent or whole life insurance term more than 10 years. (please verify this)
Loan against insurance policy Eligibility:
- You become eligible for the loan after you must have gone three years from the date of commencement of your insurance policy.
- You are only allowed to borrow 50% – 60% of the premium amount that you have paid as at the time.
- Strictly for resident Indians.
Calculation of loan eligibility amount:
The amount of loan you will qualify for is calculates from and depends on the value of your policy’s surrender value.
Your credit history does not really make a difference in this loan.
Loan with LIC policy Down Payment & EMI calculation:
There are no down payments otherwise known as pre-payment charges in insurance policy loans in India.
The payment for loan drawn against insurance policies is normally stretched out up two twelve months. But this tenure is subject to renewal or review as the case may be.
Loan against insurance policy Interest rate bank wise:
Most of the time, the interest rate for the loan need to be pay on a six months basis; which is twice a year. The rate is usually about 10%.
Top five banks providing loan against insurance policy in India:
- Life Insurance Corporation.
- Edelweiss Tokio Life.
- State Bank of India (SBI).
- ICICI Bank.
- HDFC Bank.
Pursuing the benefits of the clients
The banks in India are turning out to be more client amicable. New imaginative arrangements are actualized nowadays, keeping in perspective the enthusiasm of the clients and are supplanting the old plans. Adaptability, ease of use and flexibility are the key viewpoints that are being remembered before planning the new plans of activity for the Indian banks. Account sorts, for example, current record, sparing record and altered stores are by and large broadly utilized by the general population of India who once were reluctant to trust the banks with their cash.