| Year | Loan Balance | Interest (Yr) | Cumulative Interest |
|---|
*Assumes simple interest accrual. LIC typically requires half-yearly interest payments to avoid compounding.
LIC Loan Against Policy Calculator – Check Eligibility, Interest & Repayment
The PlanMyReturns LIC Loan Against Policy Calculator helps you estimate how much loan you can get from LIC, how much interest you will pay, and your total repayment amount, based on your policy’s surrender value.
This calculator is designed for people who already hold an LIC policy and want quick liquidity without surrendering their policy.
What Is a Loan Against LIC Policy?
A loan against LIC policy is a facility where you can borrow money from LIC by keeping your life insurance policy as security.
Instead of surrendering your policy and losing long-term benefits, LIC allows you to:
- Borrow a percentage of the surrender value
- Continue policy coverage
- Repay the loan later with interest
This option is commonly used for:
- Emergency expenses
- Short-term cash needs
- Avoiding high-interest personal loans
When Did LIC Start Offering Loans Against Policies?
LIC has been offering policy loans for decades, primarily on:
- Endowment plans
- Money back plans
- Paid-up policies
Loan eligibility depends on:
- Policy type
- Surrender value availability
- Current LIC circulars
Why People Search for LIC Loan Calculators
Most policyholders want clear answers to questions like:
- How much loan can I get on my LIC policy?
- Is LIC loan cheaper than personal loan?
- How is LIC loan interest calculated?
- What happens if I don’t pay LIC loan interest?
- Is LIC loan simple interest or compound interest?
This calculator answers all of these before you visit the LIC branch.
What This LIC Loan Calculator Helps You Calculate
Using this calculator, you can instantly find:
- Maximum loan amount available
- Loan eligibility percentage
- Total interest payable
- Total repayment amount
- Year-wise interest accrual schedule
- Impact of tenure in years or months
All calculations follow standard LIC loan logic.
How LIC Loan Eligibility Is Calculated
LIC generally allows loans based on surrender value (SV).
Typical Eligibility Rules
- Endowment / Money Back Plans: up to 90% of surrender value
- Paid-up / Other Plans: up to 85% of surrender value
Your calculator automatically adjusts eligibility based on the policy type you select.
Interest Rate on LIC Loan (How It Works)
LIC loan interest rates:
- Are decided by LIC and may change periodically
- Are usually lower than personal loans
- Are generally calculated as simple interest
- Often payable half-yearly
If interest is not paid on time, LIC may add it to the loan balance, increasing your total cost.
This calculator assumes simple interest, which matches common LIC practice.
LIC Loan Calculation Formula
The calculator uses the standard LIC loan formula:
Loan Amount = Surrender Value × Eligibility %
Total Interest = Loan Amount × Interest Rate × Loan Tenure
Total Repayment = Loan Amount + Total Interest
This keeps estimates transparent and easy to understand.
LIC Loan Example
Suppose your LIC policy has a surrender value of ₹5,00,000.
- Policy type: Endowment
- Eligibility: 90%
- Loan tenure: 5 years
- Interest rate: 9%
Result:
- Maximum loan amount: ₹4,50,000
- Total interest (5 years): ₹2,02,500
- Total repayment: ₹6,52,500
The calculator shows:
- Interest breakdown year-by-year
- Visual split between loan and interest
How to Use the LIC Loan Against Policy Calculator
- Enter surrender value
- Select policy type
- Check auto-updated eligibility %
- Choose loan tenure (years or months)
- Enter interest rate
- Click Calculate
You can:
- Share your plan
- Download interest schedule
- Export results as CSV
LIC Loan vs Other Loan Options
LIC Loan vs Personal Loan
| Feature | LIC Loan | Personal Loan |
|---|---|---|
| Interest rate | Lower | Higher |
| Security | LIC policy | Unsecured |
| Approval | Faster | Depends on credit |
| Risk | Policy linked | Credit score impact |
LIC Loan vs Gold Loan
| Feature | LIC Loan | Gold Loan |
|---|---|---|
| Collateral | Insurance policy | Physical gold |
| Market risk | None | Gold price risk |
| Tenure | Flexible | Usually short |
Important Things to Know Before Taking LIC Loan
- Loan reduces death claim if unpaid
- Interest must be paid regularly
- Loan amount cannot exceed surrender value
- Terms vary by policy and LIC circulars
This calculator helps you plan before committing.
Why Use PlanMyReturns LIC Loan Calculator
- Matches LIC eligibility logic
- Supports years and months tenure
- Clear interest schedule
- Visual breakdown
- Shareable plans
- No login required
frequently asked questions
Up to 90% of surrender value for endowment and money back plans, and 85% for paid-up plans.
LIC generally charges simple interest, payable half-yearly.
Unpaid interest may be added to the loan balance, increasing total repayment and reducing policy benefits.
Yes. Outstanding loan and interest are deducted from maturity or death claim.
For LIC policyholders, LIC loan is usually cheaper and safer than personal loans.
Yes. LIC loans usually allow flexible repayment, subject to policy terms.