Allowing an insurance policy to mature over time is a beneficial financial move. This is because the policy can shield you and your family from emergencies and unforeseen incidents in the future. Owing to the importance of insurance cover, it is best not to disturb your policy or eliminate it from your portfolio.
However, when you find yourself requiring money urgently, don’t hesitate to use your policy as security to raise funds quickly while keeping it intact.
You can avail a loan against an insurance policy to get sufficient financing for your short-term needs. Read on to know more about the benefits and process of availing funds via a loan against the insurance policy.
You can get a loan by pledging varied insurance policies
Usually lenders accept a wide range of insurance policies when it comes to sanctioning a loan against the insurance policy. However, when applying for the loan you should check with your lender regarding the policies they accept. This is especially important because many lenders accept high-value, traditional insurance policies but refuse to accept ULIPs and term insurances. Also, other lenders prefer specific money back policies based on their net worth. So keep a tab on the lender’s prescribed insurance policy list and then use it as collateral for a loan if need be.
You can get a high-value sanction with ease
Lenders decide the loan amount by weighing the value of your insurance policy folio. Pledging a high-value folio will usually get you a loan amounting to up to 80% of the insurance policy’s value. Also, many lenders sanction a loan based on the amount of premium you have already paid on your insurance. This distinction is mostly done when you have a very high premium apart from your insurance’s net worth. Not only this but you also get a high-value loan against insurance policy at a competitive interest rate, as the loan is secured by an asset.
You can get the loan on easy terms with minimal paperwork
As per the terms of this secured loan you can be eligible for the loan against insurance policy very simply. Based on the standard eligibility criteria of this loan, if you are a salaried or self-employed resident citizen of India, earning a regular income and are at least 21 years of age, then you can apply for this loan in no time using just a handful of documents. All you need to submit is an ID proof, address proof, document proof of your insurance, and a passport size photograph.
You can apply for the loan hassle-free and fast
Apart from easy eligibility norms, it will always work in your favour if you choose the right lender to apply to for a loan against the insurance policy. For example, trusted lenders like Bajaj Finserv allows you to apply for a loan against insurance policy online or offline based on your comfort. In case you choose to apply online you will have to submit a short and easy online application form by filling out all your personal details. Then you will receive a confirmation call from a representative based on which you will have to submit the documents for verification.
You can repay the loan on flexible terms
Borrowing a Loan Against Insurance Policy from lenders like Bajaj Finserv will also fetch you repayment benefits apart from a high loan amount. Firstly, you can choose to repay the loan over a tenor of up to 12 months as per your financial standing and also opt to take the loan as a term loan or Flexi Loan. The Flexi loan facility allows you to repay and withdraw funds from your total sanction as per your needs and pay interest only on the amount you use. Moreover, you can pay interest-only EMIs all through the tenor to manage your cash flow better and repay the principal once the tenor is up. In addition, you don’t have to pay an extra charge for pre-payment or foreclosure.
Now that you know the convenience that this financing option offers, choose a good loan against the insurance policy to fulfil all your requirements comfortably.