Loan against shares , mutual funds & Bonds offer opportunities to monetise investments in listed shares or mutual fund units or other securities to raise capital for business and financing needs. No additional security or collateral, except for the shares are required to be pledged. The value of the loan can range anywhere between 50- 90% of the value of the pledged security.
Many institutions offer quick processing and attractive interest rates to the borrowers for this facility. Interest rates, while differing from one institution to another, are generally lower than that of a credit card or a personal loan since they are secured by a collateral which is the security pledged.
Easy, Faster Processing
Most institutions also offer a simplified process for availing this short term loan facility which is sometimes processed even faster than a normal EMI-based loan by some of the larger banks and financial institutions.
Advantages Of Loan Against Securities:
- Ideal for short term funding.
- Enables instant liquidity against shares without selling them.
- Takes care of all investment as well as personal needs.
- The tenure of the loan against security is one year, but it can be easily renewed.
- The rate of interest ranges from 9 – 12%. The rate varies from bank or NBFC.
- The processing fee is charged at ~1-2% of the loan amount.
- The loan amount depends on the security the borrower is offering.
- No charges for prepayment of the loan.(T&C apply)
- The loan has to be repaid within the fixed period. If the borrower fails to make the payment, the lender can file a case for recovery and the balance amount has to be repaid within 3 years from the date of sanction of the loan.
