LIC Loan Against Policy: How to Apply Online

Need funds urgently? Instead of surrendering your LIC policy, you can take a loan against it. LIC offers loans up to 90% of the policy's surrender value at competitive interest rates. The policy continues and your coverage remains intact. This guide explains the complete process.

What is a Loan Against LIC Policy?

A loan against an LIC policy is a secured loan where your life insurance policy acts as collateral:

• You borrow from LIC — not from a bank
• Loan amount: Up to 90% of the surrender value of your policy
• Interest rate: 9-10% per annum (simple interest, charged half-yearly)
• No fixed EMI — you can repay at your convenience during the policy term
• Policy remains active — your life cover and bonus accumulation continue
• No credit check — since the policy is collateral, no CIBIL score needed

Eligibility: Which Policies Qualify?

How to check surrender value: Log in to ebiz.licindia.in, go to My Policies, and check the surrender value of your policy.

Loan Amount Calculation

The loan amount depends on the surrender value of your policy:

Example:

• Policy: LIC Jeevan Anand (Endowment)
• Sum assured: ₹10,00,000
• Premiums paid: 10 years
• Surrender value: ₹3,50,000
• Maximum loan available: ₹3,15,000 (90% of ₹3,50,000)

Interest Rate

• Current interest rate: approximately 9-10% per annum (simple interest)
• Interest is charged half-yearly on the outstanding loan balance
• LIC revises the rate periodically — check the latest rate at your branch or on licindia.in
• If interest is not paid, it gets added to the loan principal (compounding effect)

How to Apply for LIC Loan Online

Step 1: Log In to LIC Portal

1. Visit https://ebiz.licindia.in/D2CPM/
2. Log in with your registered credentials
3. If not registered, create an account first

Step 2: Check Loan Eligibility

1. Go to My Policies
2. Select the policy you want to take a loan against
3. Click on Loan or Loan Eligibility
4. The system will show the maximum loan amount available

Step 3: Apply for Loan

1. Click Apply for Loan
2. Enter the loan amount (up to the maximum eligible amount)
3. Verify your NEFT/bank details — the loan amount will be credited here
4. Submit the application

Step 4: Complete Verification

1. You may need to complete e-signature or OTP verification
2. Accept the loan terms and conditions
3. Submit the loan request

Step 5: Receive Funds

• The loan amount is credited to your bank account via NEFT within 3-7 working days
• You will receive an SMS/email confirmation

How to Apply Offline (Branch Visit)

If online application is not available for your policy:

1. Visit your LIC servicing branch
2. Carry:
   • Original policy bond
   • ID proof (Aadhaar/PAN)
   • Cancelled cheque / passbook copy
   • Loan application form (available at branch)
3. Submit the form and documents
4. The branch processes the loan within 5-10 working days
5. Loan amount is credited to your bank account or paid by cheque

Loan Repayment

One of the biggest advantages of an LIC policy loan is flexible repayment:

Repayment Options:

1. Pay anytime — no fixed EMI schedule; pay any amount whenever you can
2. Pay interest only — keep the principal outstanding and just pay half-yearly interest
3. Full repayment — pay the entire loan + interest at once
4. Deduction at maturity — if not repaid, the outstanding loan + interest is deducted from the maturity amount
5. Deduction from death claim — in case of death, loan is deducted from the claim amount

How to Repay:

• Online: Log in to ebiz.licindia.in → Loan Repayment
• At branch: Pay by cheque/DD at your servicing branch
• Via agent: Through your LIC agent

Warning: If the outstanding loan + interest exceeds the surrender value, LIC may auto-foreclose your policy. Always pay at least the interest to keep your policy active.

What Happens If You Don't Repay?

Loan Against Policy vs. Surrendering the Policy

Recommendation: Always prefer a loan over surrender unless you're sure you don't need the policy anymore.

Important Tips

1. Borrow only what you need — the interest adds up quickly if left unpaid. Repay as soon as possible.
2. Pay at least the interest half-yearly — this prevents your loan from ballooning and potentially foreclosing your policy.
3. Check your loan balance regularly — log in to the LIC portal to track outstanding loan and interest.
4. Don't let the policy lapse while a loan is outstanding — keep paying premiums on time. See our premium payment guide.
5. Compare with bank personal loans — LIC policy loan rates (9-10%) may be higher than some bank personal loans. Compare before deciding.

Frequently Asked Questions

1. What is the minimum loan amount I can take against my LIC policy?

There is no official minimum, but practically the loan amount depends on your policy's surrender value. Most branches process loans of ₹5,000 and above.

2. Can I take a loan if my LIC policy is lapsed?

No. The policy must be "In Force" (active with all premiums paid up to date). You need to revive the policy first before applying for a loan.

3. How many times can I take a loan against the same policy?

You can take multiple loans as long as the total outstanding loan doesn't exceed 90% of the current surrender value.

4. Is there any processing fee for LIC policy loan?

LIC does not charge a processing fee or prepayment penalty on policy loans. The only cost is the interest on the outstanding amount.

5. Can I take a loan against someone else's LIC policy?

No. Only the policyholder (or assignee) can apply for a loan against the policy.

6. Will taking a loan affect my LIC policy bonus?

No. Your policy continues to earn bonus as usual even when a loan is outstanding. The bonus is calculated on the sum assured, not the net amount after loan.

7. How do I check my outstanding LIC loan balance?

Log in to ebiz.licindia.in and go to your policy details. The outstanding loan and interest will be displayed. You can also send SMS: ASKLIC LOAN to 9222492224.

This guide is for informational purposes only. CitizenNest is an independent platform and is not affiliated with LIC or the Government of India. Always verify details on the official LIC website.