Policy Coverage (91 top policies)
By using our Surrender Value Calculator and carefully considering the risks and benefits, you can make a more informed decision about whether a loan against insurance policy is the right financing option for you.
A loan against life insurance policy (LAIP) is a secured loan where you pledge your policy as security to borrow money. The lender will determine the maximum loan amount you can qualify for based on a loan to value (LTV) ratio. This usually ranges from 50 to 90% depending on the policy. This ratio represents the percentage of your policy's surrender value that the lender is willing to lend against. You are then issued a credit limit which functions like a bank overdraft facility, where you are charged interest only on the amount you withdraw from this credit limit.
With Mera Kal, you can get loan against life insurance policy in 5 simple steps:
Overdraft against life insurance policy works like a bank overdraft limit, where you are only charged interest on the amount you withdraw. Example: You have a limit of ₹ 1 Lakh and the interest rate for the year is 10%. But if you used only ₹ 50,000 then the interest that you would have to pay would be ₹ 5,000 for the year.
Feature | Overdraft | Term Loan |
---|---|---|
Flexibility | Pay interest only on the amount you use | Receive the full amount upfront and repay with interest over a fixed term |
Interest rates | 14 to 16% (reducing balance) | 13 to 15% (reducing balance) |
Repayment terms | Revolving credit line so repay when you can | Fixed repayment terms |