Hello, this is Pankaj is so. Today we are discourse one of the essential topics, loan insurance.
Many of you don’t even know that you’ll have to include experience on loan insurance
before getting your sanction letter from a private bank or NBFC in India
Do you know what the benefit of taking the Loan Insurance, and is it mandatory to make one? Let me guide you on that.
What The Benefits of Taking The Loan Insurance
- Loan insurance is taken to protect your co-applicant, who is most of the cases are your parents. Loan Insurance simply means that is something like terminal illness or death happens to the applicant, in that case, the CO applicant will not be liable to pay the loan back; instead, the insurance company will pay for
- The charges of loan insurance are generally between 0.5 to 1% for public banks. about 1.5% for private banks and about 2% for NBFC
- Even if you of opt for Loan insurance, you don’t have to pay for it upfront. The lender actually takes it from the approved loan limit. For example, if 40 lacs is approved to you and 50000 is the insurance amount, your loan amount will be modified to 4050000, and the lender will take 50000 out of this
- It is not mandatory to take a loan insurance in government banks, but it is compulsory when it comes to private banks and nbfc.
- The final point the cost of loan insurance is actually a factor of the loan tenure and the applicant’s age. The lower the loan tenure will be the insurance cost.
so if you think that the loan insurance cause the lender is telling you is on the higher and higher than the approximation I just give you and point number two that in that case, it is very probable that the lender is making some error in adding those parameters in the Insurance form and it is a very very common mistake in case of government bank
so if you think the charges will be in the higher side then please reach out to your wemakescholars financial officer. They will talk to the bank, and they will try to guide them on how to reduce it
one more extra piece of information which I want to share it is that in the state bank if you opt for loan insurance that is Rinn Raksha, you get the point .5% reduction in your rate of interest
That’s it for this Blog. If you have any questions, please don’t hesitate to put them in the comments below, and I will definitely get back to you if you officiate the efforts we put in to bring out the information to you, then you can subscribe to our Telegram channel