Once surrender value is calculated, loan to the extent of 90% of surrender value can be granted to the policyholder after filling certain legal formalities such as executing a bond assigning the policy etc. In case of paid up policy i.e. lapsed policy, the loan % allowed is 85%. A paid up policy is a lapsed policy. It is entitled for the vested bonus (Bonus already accrued). It is not entitled for future bonus of future valuation. The % of loan granted varies from company to company.
