Loan against Insurance Policy for Home Expenses

Setting up a new house or renovating your existing home can be anything but cheap. A kitchen or bedroom makeover can easily run into lakhs, and in some cases, you may require major repairs that you haven't accounted for. However, drawing funds from your savings can be detrimental to your financial planning. This is where Bajaj Finance's loan against insurance policy comes in, allowing you to keep your finances stable while ensuring that your home upkeep is well taken care of.



Renovating your home can be an expensive affair, considering the cost of paints, flooring, plumbing, carpentry work, and more.



Whether you're thinking of upgrading your furniture or landscaping, expenses like purchasing home appliances, outdoor furniture, pots, plants, etc., can escalate quickly. By taking a loan against insurance policies, you can manage these expenses without compromising on your cash reserves.



Structural damage to your home is one of the most significant expenses you can incur. Be it a leaking roof that requires fixing or a loose foundation for which you need professional help, such costs can be offset with a loan.



Unexpected repairs can arise when you least expect them, from a burst pipe to a leaking roof. You may need to hire an architect and engage civil contractors. These repairs could cost a significant amount depending on the size of the house.



How about getting the smart home makeover you’ve always wanted? If you want to convert your home into a smart home with smart doorbells, thermostats, lighting, or security cameras, a loan against an insurance policy can cover the cost.

Features and benefits of loan against insurance policies


All you need to know about our loan against insurance policy

Watch this video to know more about the key features of our loan against insurance policy.

  • Loans up to Rs. 25 crore*

    Finance a diverse range of needs with funds up to Rs. 25 crore* against your endowment and ULIP policies.

  • Funding against policies under lock-in period

    We cover your immediate liquidity needs even if the insurance policy is under lock-in period.

  • Get loan while keeping your insurance coverage intact

    Get loans against your endowment and unit-linked insurance policy to meet your liquidity needs without having to surrender your policy. So, your insurance coverage and investment benefits remain intact.

  • Flexi loan against endowment and ULIP policies

    Get a flexi loan against a Unit Linked Insurance Plan (ULIP). Make multiple withdrawals from your total sanctioned amount and pay interest only on the amount utilised. Get a flexi loan against an endowment and Unit Linked Insurance Plan (ULIP). Make multiple withdrawals from your total sanctioned amount and pay interest only on the amount utilised.

  • Pay interest on completion of policy lock-in period

    For loan against policies which are under lock-in period, you can repay the principal and interest amount together after the completion of the lock-in period.

  • Pre-approved loan limit

    Pre-approved loan limit

    Get a minimum loan of Rs. 10,000 and maximum of up to Rs. 25 crore. This is applicable for the maximum tenure of up to 96 months. Get loan of up to 90% on policies against surrender value.

  • Easy prepayments

    Flexible prepayment and foreclosure options let you prepay or foreclose your loan at no additional charges.

  • Apply with minimal documents

    You only need to submit Officially Valid Document (OVD) for ID and address proof, bank account proof, and document proof of the insurance policy to apply for a loan.

Show More Show Less

Eligibility criteria and documents required

You can apply for our loan against insurance policies online if you meet the basic criteria mentioned below*. After meeting the criteria, you will need a set of documents to complete your application process.

Eligibility criteria

  • Age: 18 years to 90 years
  • Minimum surrender value of policy: Rs. 10,000
  • Employment: salaried or self-employed
  • Must have an active Endowment and ULIP policy of either Bajaj Allianz Life, ICICI Prudential, Max Life, TATA AIA, Aviva India, or Life Insurance Corporation of India (LIC) 
  • Nationality: Indian

Documents required**

  • One copy of your recent photograph
  • Aadhaar card/ passport/ voter’s ID as address proof
  • PAN card
  • Insurance policy document
  • Bank account statement/ copy of a cheque as bank account proof
  • Any other document as may be required by Bajaj Finance Ltd.

**Please note that the list of documents mentioned here is indicative. You will be notified on the complete list of documents required by our representative while filling the application form.

How to apply for a loan against insurance policy

Video Image 00:44

A step-by-step guide to apply for loan against insurance policy

Step 1: Click on ‘Apply’ at the top of this page to open our online application form.
Step 2: Enter your name, email ID, and mobile number.
Step 3: Under ‘Type of Security’, select Insurance Policy and provide your surrender value.
Step 4: Select your city of residence and after agreeing to the terms and conditions, click ‘Submit’.

You will receive an OTP on the mobile number for verification. Enter the OTP to submit the form.
Once your application form is submitted, our representatives will get in touch with you for further proceedings.
Disbursement shall be done post complying with sanction terms, successful verification of Application and policy assignment.

  • Did you know?

    You can get a loan against your policy still under lock-in period

  • Did you know?

    You can access funds while keeping your insurance cover intact

  • Did you know?

    You can avail loan against insurance policy with minimal documentation

  • Did you know?

    You can pay interest only on amount utilised

Applicable fees and charges

The following charges are applicable on loan against life insurance policies:

Types of fees Charges applicable
Interest rate Up to 20% per annum
In case of lock-in policies, compounding interest will be charged
In case of lock-in free policies, simple interest will be charged
Processing fee Up to 36% per annum (inclusive of applicable taxes) of the loan amount or

Up to Rs. 10,000 (inclusive of applicable taxes)
Prepayment charges Full prepayment - Up to 4.72% (inclusive of applicable taxes) on the outstanding loan amount as on the date of full prepayment
Part-prepayment - Up to 4.72% (inclusive of applicable taxes) of the principal amount of loan prepaid on the date of such part prepayment
Bounce charges In case of default of repayment instrument, Rs. 1,200/- per bounce will be levied.
Penal interest Delay in payment of monthly instalment shall attract penal interest up to 42% per annum applicable on the monthly instalment outstanding, from the respective due date until the date of receipt.
Mandate rejection charges Up to Rs. 450/- per month from the first month of due date for mandate rejected by customer’s bank until the new mandate is required
Stamp duty Payable as per state laws
Annual maintenance charges
Up to Rs. 2,949/- (inclusive of applicable taxes) if the loan tenure is above 12 months
Renewal Fees Up to Rs. 2,950/- (inclusive of applicable taxes) to be collected on renewal
Legal charges At actuals
Broken period interest/ pre-monthly instalment interest Broken period/ pre-monthly instalment interest shall mean the amount of interest on loan for the number of day/s which is/are:
Scenario 1: Over and above the period of 30 days from the date of disbursement of the loan
Method of recovery of broken period interest/ pre-monthly instalment interest:
Added to the first instalment amount
Scenario 2: Less than period of 30 days from the date of disbursement of the loan, interest on first instalment will be charged for actual number of days

Frequently asked questions

What is loan against insurance policy?

If you need some financial help and looking for availing a loan, you can get a loan against your insurance policy. In this case, your insurance policy acts as the collateral against the loan amount.

Can we take loan against insurance policy?

The eligibility criteria for taking a loan against your insurance policy is relaxed compared to other types of loan. It depends on the type of insurance policy you own and whether it is approved for loan by the lender. Loan against Insurance Policy is given only against Unit-linked plans (ULIPs).

What are the processing charges levied by Bajaj Finance Ltd. on the loan against insurance policy?

A processing fee up to 3% (inclusive of applicable taxes) of the loan amount or up to Rs. 10,000 (inclusive of applicable taxes).

When is the interest payable on the loan against insurance policy and how is it calculated?

1. If the policy is in a lock-in period, a bullet interest payment will be made on completion of the policy lock-in period. A bullet repayment is a lump sum payment made for the entirety of an outstanding dues under the loan amount at maturity.
2. If the policy is out of the lock-in period, the interest is calculated and payable monthly.
In case of lock-in policies, compounding interest is to be charged.
In case of lock-in free policies, simple interest to be charged.

How much time does it take to process a loan against insurance policy?

It takes approximately 24 hours to process a loan against an insurance policy. This is subject to the submission of all required documents.

What are the documents required to get a loan against insurance policy?

You need to present the following documents to avail of a loan against an insurance policy:

  1. One copy of your recent photograph
  2. PAN card
  3. Aadhaar card/ passport/ voter’s ID for address proof
  4. Valid insurance policy document
  5. Bank proof, such as bank account statement or cheque copy
Is the principal amount convertible to EMI?

No, you cannot convert the principal amount to EMIs.

Is partial withdrawal allowed during the subsistence of the loan?

Yes, there is an option for partial withdrawal during the subsistence of the loan. However, it is strictly subject to successful verification by the lender. Bajaj Finance holds the right to deny partial withdrawal requests at its sole discretion.

Can a policyholder with multiple ULIP policies, avail loan against all policies in one go?

Yes, a policyholder with multiple ULIP policies can avail loan against all policies in one go. This is subject to the assignment of all the policies in favour of Bajaj Finance.

To whom will the policy be assigned, if one decides to get a loan against insurance policies?

The policy has to be assigned in favour of Bajaj Finance Limited.

Whom should the customer contact for a service request?

You can call the customer centre at 1800-123-2557 or write to us at for any loan against insurance policy-related service requests.

Is the loan processing done by Bajaj Finance or its partner insurance companies?

All loans are processed by Bajaj Finance Limited.

What will be the effect of foreclosure of a loan against an insurance policy?

In case the loan is availed, the policy will be assigned in favour of Bajaj Finance. There are two ways of closing the loan –
1.You can repay the total outstanding in Bajaj Finance Limited designated bank account. Post receipt of payment, loan account shall be closed and policy will be assigned back to you.
2.You can repay is repaying via surrendering the policy. Basis your request, the insurance company will surrender the policy and the surrender value will be transferred to Bajaj Finance Ltd., since the policy is assigned to them. Bajaj Finance will adjust s the loan amount and refund the surplus (if any) to the you and close the loan account.

Who can surrender the policies against which loans have been availed?

Policy surrender will be at the discretion of the lender only.

Who initiates the communication for premium payment details?

Any intimation regarding premium payments is sent directly to the client by the insurance company.

Show More Show Less