2. Loans against insurance policy

You can avail this loan instead of taking a personal loan, another good alternative. By pledging your insurance policies like LIC endowment policy to the banks, you can get loans up to 90 percent of the current surrender value of the policies; and the interest rates offered on these loans range from 9 percent to 13 percent.

However, you can take loans against only on those policies in which you have paid their premiums on regular basis for three years or more. In simple words, policies must be at least of three years old in order to availing insurance policy loan. It will take maximum 2 to 3 days for you to get this loan.

3. Loans against fixed deposits

Have you ever heard of “overdraft on fixed deposit”? This is nothing but the loans against fixed deposits. In case of an emergency you don’t need to break the deposit instead you can take loan against the fixed deposit. Most of the banks will lend up to 75 percent to 85 percent of the deposit amount as loans. Usually, the interest charged on fixed deposits loans is just 1-2 percent higher than the interest rate on the fixed deposit. Thus, if the deposit was earning an interest of 8 percent then loan taken against it will have interest rate of 9 percent to 10 percent and the loan needs to repay before the maturity of the deposit.

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