A loan against securities is offered against the value of bonds, shares, and other securities. This loan type has been quite unheard of, until recently, because Indians generally prefer investing in low-risk investments like recurring deposits, PPF, mutual funds, and others.
You can get a loan by leveraging your equity shares, equity mutual funds, FMPs, KVP’s, non-convertible debentures, gold deposit certificates, and T-Bills. The 100% debt mutual fund offers a high loan to value ratio and can be used to avail of a higher loan amount.
Here are some questions you might have about a loan against securities, answered:
What’s the Eligibility Criteria?
The primary eligibility criteria include-
You should be an Indian resident
You should be at least 25 years old at the time of loan sanctioning
Both salaried and self-employed individuals should have a regular source of income
Your securities need to have a minimum value of Rs.25 lakh
What’s the Loan Application Process?
The possibility of you getting a loan against shares depends on the current market situation and also your portfolio. You need to meet the eligibility criteria and have all the valid documents, ID proof, and share certificates.
You can apply for the loan online and get instant approval when you have submitted all the required documents. If your loan application gets approved, then a current account would be opened in your name. You would be given an ATM card or a cheque book to help you cash the loan. Interest is charged only on the amount withdrawn and the period in which it is utilised.
What are the key Benefits of this Loan?
A lot of people are turning to a loan against securities when they are in need of finances. Its hassle-free processing and immediate sanctioning make it a viable option for loan seekers.
Unlike other loans, you can avail this loan without a guarantor. Apart from the securities you pledge, you don’t need to submit any other collateral. You can take a loan of up to Rs.10 crore by mortgaging your shares. The best part is that you can still earn profit from the performance of your shares without losing ownership of them.
You can even swap