If you have a life insurance policy, you can take a loan against it when you need money. The loan amount depends on the type of policy and its surrender value. Loan against policy is available easily and at low interest rate compared to personal loan. We are telling you about loan against life insurance policy…
In case of life insurance, if you surrender the policy before its full term, you get back a part of the amount paid as premium. Charges are deducted in this. This amount is called surrender value.
No credit score required: When you take a loan against an insurance policy, you do not have to go through a credit check. This means that even if you have a low credit score or no credit score, you can still get a loan easily.
Lower interest rates than personal loans: The interest rates on loans against insurance policies are generally lower than other types of loans like credit cards or personal loans. The interest rate on loan against insurance policy can be 10-13%.
No repayment schedule: Unlike other loans, you generally do not have a fixed schedule of repayment for a loan taken against an insurance policy. You can pay the loan as per your convenience. You just have to keep paying the interest.
For loan against life insurance policy, you need to submit the original policy documents along with the application form. To receive the loan amount, a canceled check will have to be submitted along with the application form. Money will be transferred to the account to which you have given the cheque.