Fullerton India Credit Co. Ltd. is Now SMFG India Credit Co. Ltd.

All You Need to Know About Loan Against Insurance Policy

Published on Jun 15, 2020Updated on Jan 19, 2024

All You Need to Know About Loan Against Insurance Policy

In the event of a sudden financial emergency, your only way out may be a loan. Under such circumstances, a personal loan is the fastest option available. However, the amount is usually disbursed all at once, and the interest is applied to the entire principle, regardless of how you use the money. Hence, at times, if you need a loan and you are not sure of the amount, taking a personal loan may feel tricky.

Alternatively, you may need a long repayment tenure whereas personal loan generally has a maximum repayment period of 5 years. There is also a limit to the loan amount which can be availed through a personal loan. However, if you have financial assets such as stocks, bonds, mutual funds or insurance, you can actually leverage them to receive a line of credit.

With a Loan against Security, you pledge financial assets based on which you are given a limit. Within this limit, you can borrow as much as you need and only pay interest on the amount you have borrowed. Loan against Insurance policy is a product that is offered by many lending institutions, which enables you to enjoy the aforementioned benefits.

However, do note that you can borrow against select life insurance policies only. For example, a permanent or whole life insurance policy qualifies for a loan application. On the other hand, a term life insurance which is a cheaper option that may people invest is not accepted as a document valid for a loan against policy. This is simply because it does have a cash value and is applicable for a specific period of time only.

Must Read: Types of Loans Available in India

SMFG India Credit has introduced loan against securities that allows you to pledge financial instruments like mutual funds, bonds, etc. However, at the moment, we don’t offer loans against insurance policies.

Read on to know more about Loan Against Securities from SMFG India Credit.

Interest Rates

Interest rates on loan against securities are competitive ranging between 11% to 18% per year. You can get a loan approved for a minimum of Rs. 5 lakhs to Rs. 5 crores. You can avail between 50% to 85% of the value of the security being put up for collateral. The value percentage is also determined by the type of security being pledged.


When taking out a loan against securities, you are essentially borrowing from yourself. Having that said, still, need certain eligibility criteria to be met before the loan is sanctioned.

Take a look at some of the basic criteria.

  • You need to be an Indian resident
  • You can only qualify if you have attained 21 years of age
  • You must be either self-employed or a salaried employee with a regular income source

Required Documents

You need following documents to avail a loan against securities from SMFG India Credit.

  • Application form
  • All KYC documents including PAN Card, Identity Proof, Address Proof
  • Passport-sized photographs
  • Original Insurance Policy or Financial Security that you intend to pledge as collateral
  • Deed of Assignment

For Salaried Individuals:

  • Last 3 months salary slips
  • Form 16
  • Proof of Employment in case your present employer does not match with your Form 16 information
  • Last 6 months bank statements that reflect any existing EMI repayment and salary

For Self-Employed Individuals and non-professionals:

  • Proof of business continuity by providing any one of these documents - Shop and Establishment Certificate/Tax registrations-VAT/Service tax/GST registrations
  • Proof of firm constitution via submission or either of these documents - MOA/AOA/Partnership Deed/GST Registration Certificate/Form 32 for knowing the latest directors
  • Audited financials for the last 3 years
  • Tax Audit Report for the last 3 years - Form 3CB + 3CD in case of proprietorship and partnerships and Form 3CA + 3CD in case of Companies
  • Latest VAT/GST/Service Tax returns for the current financial year
  • The breakup of all secured and unsecured loans
  • As on date List of Directors and Shareholding Pattern
  • Sanction letters for any existing loans with corresponding statements reflecting EMIs for the last year
  • Business Account Statements for the last 1 year
Must Read: What is the Difference Between Secured and Unsecured Loan?

How To Apply for Loan Against Securities at SMFG India Credit?

You can apply for a loan against securities at SMFG India Credit by submitting your interest online. Alternatively, you can also visit a SMFG India Credit branch located close to your home or office to share an interest in their loan application in person.

Choosing to place your loan application online through the SMFG India Credit website entails the following processes.

  1. You can register your interest to avail a loan against securities product via the website
  2. You should get a call from the LAS department within 24 to 48 hours to discuss in detail your loan eligibility, minimum and maximum amount that may be sanctioned depending on your credit history, CIBIL score and financial status
  3. You will be asked to fill in an application form that will cover all your personal, financial, and professional details
  4. You will be informed of the interest rates that you are eligible for along the tenue of the loan repayment
  5. You can submit your paperwork online or have them collected from a location of your choice through a bank executive
  6. The review and verification of the loan request by SMFG India Credit starts at this stage
  7. If you meet all the parameters and SMFG India Credit determines you to be a viable risk, your loan request will be approved
  8. You will receive a loan agreement which will contain the loan amount sanctioned, tenure of repayment, interest components, along with all applicable terms and conditions

For more information, write to SMFG India Credit at   or call customer service on their toll-free number 1800 103 6001.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us

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