Loan Against LIC Policy – Now apply and repay online

As of now, whenever you need the Loan Against LIC Policy, then you have to apply it by visiting your service branch. However, now LIC started the online process of applying for Loan Against LIC Policy.

To avail the loan you have to visit the servicing branch and avail the loan by submitting few forms. It is a cumbersome process if the person is not staying in the same locality.

However, recently LIC started the facility to apply or avail Loan Against LIC Policy online. Before jumping into this, let us find out the loan features of LIC policies.

Features of Loan Against LIC Policy

# The maximum loan amount available under the policy is 90% of the Surrender Value of the policy (85% in case of paid up policies) including cash value of the bonus.

# All policies are not eligible for loans (like term life insurance). Hence, you have to check the eligibility of that (usually mentioned in policy bond).

Interest on the loan is payable half yearly.

# The minimum period for which a loan can be granted is six months from the date of its payment. If repayment of the loan is desired within this period the interest for the minimum period of six months will have to be paid.

# In case the policy becomes a claim either by maturity or death within 6 months from the date of loan interest will be charged only up to the date of maturity/death.

# You repay the loan with interest or continue paying only the interest and allow the loan principal to be deducted at the time of the claim payments.

# To avail loan, you must be paid the premium for at least 3 years.

# You have to assign the policy to LIC as security and they keep the original bond with them.

# If you do not pay interest amount within 30 days from the due date, LIC reserves the right to foreclose the policy and settle the loan amount against the proceeds. However, such foreclosure not applies for fully paid up or for the in force policies.

# The first payment of interest is to be made on the next policy anniversary or on the date of 6 months before the next policy anniversary, whichever is earlier. After that, for every half year, you have to pay the interest.

# You can avail the second loan against the same policy while the first loan has the not been repaid. However, the cap of 90% of Surrender value shall apply to the combined amount.

# You can avail the loan against LIC policy from other banking institutes also (like banks). However, the quantum of loan availability may be less and also they may charger higher interest rate than the LIC.

Loan Against LIC Policy – How to apply and avail online?

As I stated above, recently LIC started the online facility to avail Loan Against LIC Policy. Along with this, you can even repay your interest or principal part of the loan using the online platform.

The steps are here as below.

# Visit the LIC’s Homepage. Click on “Online Loan” tab, which is available under “Online Services”.

Loan Against LIC Policy apply online

# Once you click the tab “Online Loan”, then you will be re-directed to another page. Here, you have two options. One is to repay interest or principal online (both with or without registration) and another is to request for the loan using your login.

Loan Against LIC Policy - Apply online and repay principal and interest online

As I told above, to request for an online loan, you must be a registered customer of LIC. However, to repay interest and principal, you either can pay with or without login.

Also, in my view, to avail the loan facility online, you must be updated your bank details. If you have updated then the loan amount will be directly credited to your bank account.

Advantages of availing Loan Against LIC Policy

# Quick access in case of emergencies.

# Now with this online facility of the loan facility, I think the process is more simplified than the earlier physical visit to the home branch.

# Interest rate is usually cheaper than your personal loan interest rate.

# Flexibility to repay only interest dues and principal at any point of time but before maturity. This flexibility is not with personal loan.

# You are pledging only policy document as a proof. However, in case of other loans, the loan eligibility depends on your credit score and the asset you pledge.

Disadvantages of availing Loan Against LIC Policy

# Limited to surrender value makes it less worthy when you actually in need of more loan. Because as I said above, the quantum of loan depends on surrender value. This surrender value usually is LESS during the initial years of the policy period. As the policy is about to close, this surrender value increases and so as your loan eligibility also.

# No Tax Benefits while repaying either principal or interest.

# You may end up less insured in case of your untimely death. Because if the loan is pending and the insured died means the nominee will receive the Life Insurance benefits LESS of the existing loan principal and interest.

Conclusion-I am not the fan of LIC traditional plans due to less insurance coverage and less returns for the long run. However, this loan against LIC policy feature will be handy to those who have emergencies. Also, it is best to go for the loan against LIC policy than going for the personal loan.

133 Responses

  1. Hello , I tried to avail Loan from LIC portal against my LIC policies , It say none of your policies are eligible for Loan . My all policies are “Fully Paidup” , I think that may be the reason . I want to know how can I get loan against my Fully Paidup policies ?

    Thanks ,

  2. Sir, I had taken 650000 as a loan from lic against my single endowment policy I was eligible to take 1125000 however I didn’t needed that much money at that time but I am in a need of more money now can I reapply for rest of it.. or I will have to make payment for the first one??

  3. Dear sir ..
    I have taken loan six months back and my total outstanding to pay back is 10000 and i want to take second loan so,i should visit again to branch for submission of documents already my bank account details and my bond is surrendered to the home branch

  4. I repaid a part of my loan today. I want to repay the remaining part now , but the online portal is telling me I can’t . what should I do? as my PAN card is not submitted I was not allowed to repay more than 50000 . So I decided to do it in 2 parts .

  5. Hi, I applied for loan on my policy online. After that it asking me to submit neft form and application form by hand in any nearest lic branch. Is that correct or do I have to submit in the branch where my policy taken? Please let me know.

  6. Dear hari my outstanding is 52k still it is showing 2000 as interest but when i go through only interest payment option it is showing exact interest amount . When i called customer care they said that there is a mistake in that software it always shows some round figure value 2000.He advised me first to pay interest only and then principal it will show zero there after paying the interest you can pay the principal amount .

  7. Hello Sir,
    Is it a good idea to take a loan against my lic policy and then won’t pay it because I want to surrender my policy anyway but surrender process is cumbersome.

  8. Sir I have applied for lic policy loan online, but I can’t go lic office in four working days , may I again apply for lic policy loan online.

  9. Hi,
    My present principal outstanding is 70K. Loan was taken on 9th Nov 2018.

    If I am trying to pay full 70K, I have to pay 2000 as interest.
    If I am trying to do partial payment of 40k, I have to pay 2500 as interest.
    If I am trying to do partial payment of 10K, I have to pay 1600 as interest.
    If I am trying to do partial payment of 5K, I have to pay 1400 as interest.

    It seems that doing partial payment is loss. Can you please throw light on this?


  10. Sir, I want to apply the loan against the LIC policy but I have the photocopy of bond? Can i apply the loan without oiginal bond?

  11. I have repaid a loan against lic bond fully on 01.09.18.but i have not still received the policy bond by post.what should I do?

  12. I have applied for loan and the loan amount is shown in LIC portal but money has not yet been disbursed. They said they will do NEFT and it will take maximum 2 day. Today is 5th day.

  13. hello all … can anyone please let me know what exactly is the interest rate charged by LIC for personal loan against policy bond ?

  14. Applied for LIC loan against policy and submitted the required documents at my nearest branch not home branch on 2nd March. After verifying the documents the officials immediately approved my loan. Even my status is showing approved. Will LIC give me an intimation before crediting the money in my account or I will suddenly get a sms from bank that account has been credited. As of now I am continuously checking my account online. How long do they take to complete the entire process

      1. Well it’s been a week and I still didn’t get the loan amount even though my loan request is approved. As I submitted the documents to the nearest branch not home branch, should I contact my hone branch or the branch where I submitted the documents

        1. Contact your home branch. Possibly take support from your agent who can help you expedite this from Home Branch side. fortunately in my case one of my acquaintance was working with LIC at Home Branch and it made things bit easier. Don’t think they act on their own, LIC is lethargic in approach unless you push them to stay active !!!

          1. Contacted with one of my friend’s father who happens to work in the same branch when my home policy belongs to. Hopefully he can resolve this mess.

          2. My friend’s father who works in LIC just confirmed me that the money has been sent through NEFT. And even showed me the NEFT receipt.

          1. This is a big blunder with LIC office people. Same thing happened with me. When I asked the home branch they have told me they are expecting hard copy of the loan request form. But the place where I have submitted the application they are saying they will not send. LIC opened online loan facility to submit papers anywhere but without training their people.

            1. I am not sure if the physical copies are sent to HOME BRANCH by the documents RECEIVING BRANCH as in my case @ NAVI MUMBAI , VASHI BRANCH there was an ONLINE VERIFICATION which LIC employee did in front of me and told that DOCUMENTS can be collected from RECEIVING BRANCH (i.e. VASHI BRANCH only) once the loan amount with interest due is squared off. For Information my Policy HOME BRANCH is in Dhanbad @ Jharkhand.

              1. Yes, I got the loan within 7 days from the date of approval directly credited to my account.
                Only thing as already advised be in touch of your HOME BRNACH by yourself. Don’t ONLY RELY on self actuated inter branch coordination. My experience is that within LIC system it just doesn’t happen.

                1. I have contacted both received branch and home branch. Received branch personal not accepting to send hard copy of loan application and home branch not accepting proceed further. In front of me received branch person verified and approved document and it was showing in my personal login licindia website. This is only because all branch LIC personal not in sync to do this job. Submitte again loan application offline. its only because they are not aware of this facility process. It is only because of LIC Division and State level officers negligence

              1. Yes Perfect they are doing this from past 3 months. When I went to home branch each one talking in different language. It’s my money they dont have any rights to play online and offline drama

  15. I applied for LIC policy loan online. In the service request form , It has given clearly that the documents to be submitted to the nearest branch office. But when I enquire they say I have to go to the home branch which is in kerala. And I have residence in Chennai, Tamil Nadu. But I’m an NRI. I want to know whether I can submit the signed documents through my mother in law to the nearest branch office. Thanks in advance.

  16. Dear Basu, Few clarifications sought, please help
    1) if I pay up for partial principal and full interest for 6 months (H1) period for a loan undertaken against LIC policy then will I be having interest for H2 to be paid based on outstanding principal amount by LIC in H2 or will it be for full loan amount sanctioned ?
    2) also can you share visibility on interest rate charged for LIC Jeevan Anand and LIC Jeevan Shree ?
    3) is the interest rate different for fully paid up policy ?

  17. do i have to submit ‘FORM OF RECEIPT FOR THE LOAN ADVANCE’ along with the application ?.
    If yes, what should i fill in 1) Assured 2) Assignee 3) Trustee

  18. Hello Basu,
    I applied for online loan on 10th Feb and submitted docs to merest lic branch on 12th Feb which is not home branch for my policies.
    Now online portal shows status for loan as approved.
    When can I expect disbursement of loan or you anticipate any hurdle based on your experience / knowhow of such matters

      1. Noted n Thanks. Will keep this group posted on my experience with LIC since had seen in threads the challenges pertaining to such online loan disbursement 🙂

          1. I have got my loan processing intimation from lic on sms. Online did work but let me tell you all you need to connect with your base branch/lic agent who sold this policy to get this expedited. That’s my experience. They don’t move fast if you don’t push them hard!!!

  19. I have applied for loan against policy on 12 the Feb 2018. This is my second loan. How much time required for disbursement. Please reply

  20. Hi
    I have given request for loan against my policy which is full paid n will mature on 2020.they have told will get in 8 days..please help if theres any way i can get it early..

      1. Hi
        Had visited today again met a concerned lady who looks after loan she said some voucher is vreated and final process is on will get 2m in my account..was she right??

            1. Hi
              Had visited today again met a concerned lady who looks after loan she said some voucher is vreated and final process is on will get tomorrow in my account..was she right??

  21. During loan tenure against LIC certificate also i will be eligible for all insurance cover under my earlier policy if its premium will be paid time to time??

  22. Dear Sir,
    I having 2 policy one have to pay in quarterly for others have to pay yearly.
    1) If i opted for a loan against both the policy certificates from LIC then also i need to pay its premium continuously??
    2) loan time frame(tenure) should be variable or until its maturity has there any selection of number of years of loan??
    3) when i have to pay interest or i can reduces my principle loan amount also within this loan period of time??
    please help in this regards,
    Dulal Rakshit

  23. I want to take 2nd loan through online . My hometown is Jharkhand and I m living in Rajasthan. My original policy is submitted in Jharkhand. If I want to take second loan can I able to submit service form to Jodhpur branch

  24. I wish to take LIC online loan. I want to know whether I can submit the policy bond anywhere or only in home branch???

  25. I am a bit confused about the interest part. Suppose I take a loan from my policy of 1 Lakh at 10 % interest, so interest amount is R. 10000. So every 6 months I have to pay Rs 10000?

      1. Thank you for such quick response.
        So do I to continue paying the interest till my policy gets matured ?

          1. What I meant to ask is if I choose to pay only the interest then for how long should I continue paying.

              1. Basav Sir ,

                Have another confusion with regards to a similar question . I already have 3 loans from LIC taken on last quarter of 2016. Now I have some corpus to repay the interests but how do I also reduce the principle amount. What should be my strategy to make the total Loan Amount of LIC as a reducing balance loan kind of stuff . I dont want to pay interest till maturity and want to foreclose the principal amount and interest like a normal EMI does .

                  1. Basav Sir …..

                    Thank you so much for such a prompt response. But as there is nobody to clarify at LIC’s end , I am compelled to ask you one more question . In the online portal of LIC , I can see couple of menu items for Loan. One is ‘Loan Interest Payment ‘ and another is ‘ Loan Repayment’ . So if I have understood you correctly , I have to make two payments…… one for interest in the first menu and to reduce the principal amount I have to opt for the second menu ‘ Loan Repayment’ and then have to choose to the submenu “Partial Payment’ . Kindly confirm if this is the correct combination of paying both the interest and to reduce the principal amount .

  26. Hi,

    My name is Nitish Kumar and Holding LIC JIWAN SARAL policy from 10/2017 of amount 3062 Per Quater and now i wish to withdraw the amount as i am not able to make the further payment due to bad financial condition. However, i will continue other LIC JIWAN ANAND policy, started from 09/2013 of Amount 5101 Per quoter.

    Hence, request you to please advise, whether i need to take the loan or shall i closed the one policy and withdraw the amount. Your response will be very kindful for me.

    Nitish Kumar

  27. Hello,

    Can you help please?

    The LIC office still is unable to help in encashing my LIC policy (plan-131, 15 years, maturing in Nov 2018).

    I have been given to believe that I can avail a bank loan against the LIC policy.

    I understand that LIC will provide a SVQ which will be used in availing the loan.

    How do I repay the loan? The policy matures in Nov 2018. Who holds the policy? What happens on maturity?

    Other details are listed below.

    Thank you.


    Ravindra K. Banthia

    B. Tech. Mech. Engr. IIT Kgp. (1980)
    Near Chandmal ji Bagh,
    Old Line Gangasahar,
    Bikaner, Rajasthan 334401

    Here is my original request for help in encashing my LIC policy:

    I request your help in expediting the processing of my application. The case is confounding because there appears to be a problem with the LIC software, and the SDC (software development cell) is unable to solve the problem. Also, the problem appears to be only for holders of Jeevan Asha II (Plan 131-15).

    I had submitted my application for surrender and my LIC policy on 12 September 2017. I was given to believe that the processing would take about one week. Almost a month has gone by
    On 27 September, I met the Branch Manager Mr. M. P. Devra (Bikaner Branch II).

    Mr. Devra informed me that there was a problem with their software and that he has escalated the matter to the Mumbai office. He also told me that prior to September 2017, the process could have been done manually, but now it was mandatory to process the surrender of policy through their software.

    If there is a problem with the software, why doesn’t LIC allow manual processing as I need to finance my daughter’s education?

    The policy details are as below:

    Commencement year: 2003
    Policy plan: Jeevan Asha II (Plan 131-15)
    Premium: 4689/- twice yearly (May and November)
    Maturity period: 15 years

    Now (on 01 Nov 2017), the branch office says that the problem is that they are unable to pay my TDS to the IT department. What excuse will they come up with next?

  28. Applied for loan, submitted all documents, online loan status shows approved. My serving brunch is different than where i submitted all documents and got acknoledgement slip from. Its been 15 days now, online status still shows open and approved, but money not yet credited to account. When asked at home branch says original policy needs to be submitted in home branch only, where as lic website says can be submitted in any nearby lic branch. When asked the branch where i have submitted docs wheather they will send the original policy to home branch, they say no it will be with them only, have given me a email id of my serving branch and have asked me to mail there. I have mailed but no reply. Totally confused now.

    1. Vicky-This is recently launched and hence may be some confusion. But as per me, you can submit the documents at the nearest. If they are not accepting this, then better to send to home branch itself.

      1. Basavaraj my nearest branch accepted it on 11/10/2017 and gave me acknowledgement slip. LIC website too says you can submit the docs at the nearest branch, online status too says docs received and approved. But than yet to get the amount. Been 15 days now.. I guess you are right since its a new thing some confusion, but hope it settles soon.

          1. Hmmm…lets see plan to wait for few more days and than work on how to get back the original policy papers if the amount doesn’t gets credited. Have raised an online grievance on lic site also yestarday. Lets see. Will keep posting updates so others can learn from my experience.

            1. Hello Vicky
              were you able to get loan amount credited with bond submitted to a near by LIC branch which if I got it right is not the “home branch”? Please reply as this would be a learning out of your experience

  29. I have taken a loan against LIC Jeevan shagun and interest not paid till 2 times of due date.Can I pay online the total (Interest+principal) amount through online

  30. Hi,

    I need to have some clarity on the taxation of LIC proceeds.

    I have a policy with SA of 6 lacs of 5 years with a monthly contribution of 10810. So the maturity proceeds after maturity would be taxable. Now after 3 years of paying the premium I made it reduced paid-up policy by not paying the premium. Now If I take a loan and allow the policy to mature and interest and loan amount is deducted at the time of maturity do I need to pay tax on the maturity proceeds only or the total I have got from LIC i.e. loan+ maturity proceeds.

      1. Cos suppose if taxation is on final proceeds only, then suppose final proceeds is 430000 then at 20% slab I would lose about 86000. However, if I take a loan then suppose if I get 2 lacs as loan and LIC at 10% interest charges interest for 6 months (policy will mature b4 that) then I will pay 10000 to LIC and left amount 4.3-2.1=2.2 would be the maturity proceeds. Then at 20% slab, I need to pay around 45k as tax total outgo=55k

        so I can save 31k. Is that good

          1. You are not getting the point. The Question is
            1. If I don’t take loan maturity proceeds would be 4.3l so LIC would deduct TDS on 4.3L
            2. But, if I take a loan then after deducting loan amount and interest my maturity proceeds would be lowered. So would TDS be deducted at whole 4.3L or the lowered maturity proceeds?

            P.S. I am in taxation department only. But this seems ambiguous.

            1. Amit-Who said you that if you take the loan then the TDS will be on Maturity Proceeds-Loan Principal and Interest?? Whether you take the loan or what, the taxation will be on Rs.4.3 lakh. If that was the case, then everyone might have did this and reduced the tax liability 🙂

  31. Dear Sir,

    How many days that they will take to credit in our account ?, and How to submit our original policy ? . Please could you advise Sir.

    Kind Regards

  32. Thank you very much for the info, and guidance!! i could really do the loan repayment fast,
    just now have to wait as to get back the original policy submitted to LIC. while taking the loan.
    Hopfully that too they send asap.
    Thanks and Regards

  33. Nikunj ji, you are not being cheated. Plan you opted is good. I agree unlike other MF or those said shares, LIC doesn’t give much returns. Please note that LIC traditional/endowment plans are combination of both insurance and investment. Not pure investment to give high returns. If you want tax benefit chose Insurance. If you want only life cover go for term plans. If you want high returns go for MF or Share markets it’s your own risk. Market trends always fluctuate do remember. I am a insurance advisor, I generally don’t misguide anyone. Our job is to explain the best to the clients as per their needs. It’s even customer/client responsibility to trust them or not. People speak sweet it doesn’t mean all are good. Please note check for claim settlement ratio and contact any other person’s who took LIC policy and got maturity amount as promised. You will not judge all these. You have right to question insurance ombudsman/insurer. Don’t blindly believe anyone. Even am not saint nor anyone. It’s your hard money to get insured and get good enough returns. However, bonus is calculated as per present rate don’t worry. Maturity claim= SA + Bonus + Final Additional Bonus. For your SA: 2625000/-; Maturity is approximately 70 lac+ after 25 yrs. After that I mean from next 26 yr life cover 2625000 runs as usual till 100 yrs.

    I have read many blogs and understood ones opinion. Retaliating is very much easy but consoling is hard.

    As per financial advisor/ planners as suggested they have to speak more on term plans instead of traditional plans and ecourage ppl to invest in term plans and markets like shares and MF. All these market trends say it’s only purely customer/client decision to opt for MF or Shares.

    Finally, before opting for insurance make a good study of those and then go ahead. We all are well matured and good at thinking then why to feel sad after doing things. I surely knew a negative comment will be coming for this comment. I don’t mind nor feel sad I just shared my opinion. If everything and everyone among us are good with love and affection then no one will criticise. Sorry if I hurt anyone feelings.

    I am not against blog or Intruders. I appreciate Basu for his good things and welfare of the society. Thank you.

      1. Yes, I know Basu ji. I can’t share complete view here. You are one very much experienced in Financial Sector.

        Some points of mine might have easy to focus. I already said i can accept both sides of your suggestions and comments. I am not a saint. I am one of blog reader and appreciate efforts people like you and others and ofcourse me to tell good for the investors. I agree, there are few ppl both from insurance and financial Sector misguide customers/client. It is our responsibility to guide them in good path. Choice is theirs whether to opt or not.

        Am not against to your reply please don’t think in that way. I understood what you mean to tell. Everyone should lve happy and better life. Even investors should think twice and recheck whether the product is suitable or not. Also, must take care of agents and their identity ( code). Few guys sell and leave. Don’t care for their clients later. This should be changed. To be frank rotation of money is making our country run forward. Every individual is part of this including me. May be some are out of context.

        I really found some usual formation from your blog. EVERY INDIVIDUAL must know about financial planning. Thank you for giving opportunity to share my comments.
        Happy Day.

  34. Hi,

    I have taken New Jeevan Anand policy in 2015 with sum assured of 2625000 and premium of 122000 annually. Return comes out 6.2% on recurring but problem is how to calculate Maturity Amount? Even LIC don’t write on website. Agent has written 70L rs after 25 years but based on LIC calculation ( Sum assured + Bonus) it comes out very less as bonus declared is 49rs. Please help if I should continue it or I will get atleast 70L+.

      1. So I should get around 6.25% return, then its fine because most review I could read happened when PPF rate was around 9% but now PPF rate has come down to 7.9%, so 6.25% for me looks good but WHEN I CALCULATE BASED ON CURRENT BONUS AND ADDITIONAL BONUS then it comes out 5% around; Do they give more bonus at the end of Maturity as we have taken any insurance part?

        My other question is Why even in traditional plan they don’t give AROUND exact maturity amount? Can we or you write to IRDA? as LIC agents goes for International tour if they sell more policies ( instead they can give bonus to customers)!

        1. Nikung-I said it may be around 5% or 6%. If you feel this is the great return, then you can continue. There is no such guarantee that LIC bonus rate increase or decrease. Even if it increases, you not get more than 6% returns. EXACT MATURITY AMOUNT-Nothing is GUARANTEED like a bonus, then how can any insurer give you exact maturity amount?

          1. But the sheet agent gave me if of around 7%; I was rest assured that I will get minimum that much but..
            Well I have mailed to IRDA ( Not sure if they are going to do anything against migthy LIC who infact runs whole Govt) but I feel cheated and harassed by LIC agents; They talk so sweetely and infact shows many high profile Policies to encourage middle class which also might be fake.

            Can all of us write to LIC and IRDA and infact Media ?

              1. I agree but I will sit tight; I trusted LIC brand name and when agents giving in writing then I would have to believe..

                I will fight and not just write article on personal finances; this was atleast other people will take better decision and LIC hopefully will start writing maturity amount based on last 10 yeras return !

                I have started collected all relevant emailid to mail and complain !


                  1. You are not understanding; all are not financial literate in India; I am being engineer and read so much about LIC brand then I thought if agents is writing for 7% and saying this is minimum then I should have to trust it… This is LIC who has to make compulsory to all agents to show 10 year performance and then let them decide!

                    1. Nikunj-I may not be understanding but check your facts that the agent who confirmed you 7% return is truly GUARANTEED or authorized by LIC or IRDA to give his clients GUARANTEE? When plans are not generated guaranteed returns, then how can either LIC or IRDA instruct its agent force to give the guarantee? This is where the IRDA came up with INDICATIVE returns.
                      At the end, it is your money, your financial life. Rest you have to decide.

  35. Dear Basu Sir,

    This is the best thing they did. At least it will prevent our valuable time from getting wasted from standing in long que. Very nicely explained article sir.


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