Have you made some investments in the form of securities such as mutual funds, shares, bonds, IPOs and a lot more? You not only can earn scheduled interest profits on them but even grab some money to cover needs without breaking them.
Yes, the facility is known as the loan against securities. Let’s provide you with some quick insights into the concept of loan against securities and its features and more.
What is a loan against securities?
Pledging your invested securities to a lender as security or collateral is called a loan against securities.
When you apply for loan against securities, you do not sell off your securities to your lending bank. You only pledge them to avail a loan to fund needs. The borrower continues to get the benefits of being a shareholder such as bonuses, rights, dividends and more.
On the other hand, the final loan amount that you can grab against your securities depends on the value or worth of your investment.
Averagely, a lot of lenders want the minimum worth of your securities to be at least Rs.10 lakh to offer loans. Similarly, the maximum loan amount that you can grab is Rs.10 crore and not more.
What eligibility parameters you need to fulfil?
To apply for loan against securities, you need to fulfil a certain level of eligibility and submit some basic documents such as:
- You need to be an Indian citizen
- Your age needs to be 21 years at the time of applying for the loan
- You need to have a consistent flow of money/income – salaried or self-employed professionals can apply
- HUF, companies, joint business owners and NRIs are not eligible to apply
- The minimum worth of the portfolio should be at least Rs.10 lakh
- ID proofs
- Address proofs
- Salary Slips
- Documented proofs of your investments/securities
- Recent colour passport sized photograph
What are the features and benefits of the loan against securities?
Other than letting you borrow a higher amount of loan, the loan against securities also comes with a host of other vital features and benefits. Have a look:
- A higher amount of loan
Do you want to apply for a loan against securities to expand your business or to cover the expenses of your children’s wedding or overseas education? The loan against securities has you covered as you can borrow up to Rs.10 crore to cover all needs.
- Relationship Manager to assist you
Lenders appoint a dedicated Relationship Manager to help resolve all your loan queries. Right from the money disbursement to repayment and other loan queries, you can solve all. A Relationship Manager is available 24/7 to help you with all loan-based requests.
- Zero part prepayment and foreclosure charges
Most of the reputed lending institutions won’t ask you for a fee when you decide to make some prepayments. You also don’t need to pay an amount to foreclose the account before its scheduled tenor.
- Online account access
Do you wish to track all the details of your loan against securities account? You can do that when you access all via the digital customer portal of your lender. This way, you would be able to track your loan progress round-the-clock and from anywhere.
- A wide range of approved securities
Most of the known lending majors have a comprehensive list of approved securities that you can pledge against and apply for a loan. A standard list includes mutual funds, shares, bonds, insurance policies, IPOs, FMPs, and ESOPs.
Some of the key features and benefits of the loan against securities facility are discussed. If you have needs, you can apply for loan against securities online today.