If you are planning to take a loan against securities, below are a few common questions every borrower applying or planning to apply for it has in their mind.
The loan value
The first dilemma every borrower has is how much they can borrow by applying for a loan against property? How does the lender decide the loan value? The maximum amount a policyholder can obtain varies as per the policy type, the current market value of the policy, and the surrender value.
Besides, there are a few other things which also influence the borrowing limit:
A lender won’t sanction a loan application demanding up to 100% surrender value of the insurance. The percentage will vary depending on the debt-burden ratio, income of the applicant, and exact monthly budget allowance.
The documents required
The documentation process is very similar to that of the other loan products and won’t require any irrelevant documents other than the mandatory ones for approval. Below is a list of required documents:
- ID proof: Pan Card, Aadhar Card, Driving License etc. which are authorized by the state or the central government as a valid ID card is accepted. Most of the listed documents can be also used as address proof.
- Document proof of securities i.e the insurance policy bond/agreement.
The charges involved
Again, the additional charges are no different from the ones levied on loan against securities loan products.
- Processing fees: can be in between 0-1% of the loan amount.
- EMI bounce charges: the same varies according to the lender's policy.
The other additional charges are foreclosure charges, part-prepayment charges, default penalty, loan statement charges etc. which are mostly zero, but the lender may decide to levy the charges as per their policy.
Read More :-Loan Against Insurance – A Quick Insight!
Alisha Antil is your best financial helper for insurance. She has a vast experience in finance and insurance and provide to you the expert advise in insuring your property and health.
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