Things to Know About How to Apply for a Loan Against Securities and Shares?

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Loan Against Securities
Loan Against Securities

To expand your money, you make investments. But what if the money you need right away is locked up in instruments like demat shares, non-convertible debentures, insurance policies, and mutual fund units? Selling them would decrease your income and prevent you from taking advantage of any potential future chances.

With Loan against Securities and shares, you don’t have to sell your assets in a hurry to meet your short-term financial needs. Additionally, a loan against stocks carries a lower interest rate than a personal loan.

Eligibility Criteria For loan against securit and shares

  • The borrower must reside in India.
  • The applicant must be older than 21.
  • Shares owned by minors, HUFs, corporations, or NRIs are not permitted to be pledged.
  • He must be an independent contractor or a salaried worker. A company, HUF, or other non-individual entity may also ask for a loan against securities and shares.
  • The applicant must demonstrate that their registered business has been in operation for at least two years.
  • The securities cannot be pledged without the bank’s approval.

How to apply for a loan against shares and securities?

Online

Presently, you can use LAS online with most of the lenders. The entire procedure is simple and quick. Click the “Apply Now” option on the lender’s official website when you are ready to apply for a loan. Enter the essential information and upload the appropriate documents. Similar to the offline mode, these documents are needed online. Once the lender has confirmed the information and papers provided, the loan amount will be arranged and disbursed.

Offline

You can bring the required documentation, such as a photo ID, proof of address, a copy of your PAN card, proof of income, bank statements, etc., to the local branch of the creditor where you want to get a loan. A finance professional will next help you submit an application for a loan against securities plan.

Some of the characteristics of LAS and Shares

Each lender has a different list of acceptable securities. The qualifying securities are listed by each lender.

The amount of money taken and the length of time held determine the interest that is due. Any sum within the loan limit may be withdrawn by the borrower.

These loans don’t include an EMI.

LAS has a set time limit for when the principal must be paid back.

Part repayments are another option that some banks provide.

The loan offered against shares is equal to 50% of the shares’ value. The overdraft cap varies depending on the state of the market. A borrower can be required to pledge more shares in the event of a significant market correction to boost the value of the shares already pledged.

Conclusion

Loan against securities in India are an excellent choice if you need money quickly. This is a great substitute for cheaply selling important assets. Loan against share is a good option for short-term demands and those where the exact cost or expense is unknown. The repayment plan can be adjusted to the borrower’s cash flow as well. Interest is only paid on the portion of the sanctioned loan amount that is actually used, and only during the time that it is being used. In addition to being quicker and simpler to apply for, the interest rate is significantly lower than that of private loans. The majority of nationalised banks provide LAS to its clients.

From Rs 5 lacs to Rs 100 crores, Rurash offers speedy and reliable financing. One of our loan officers will work with you every step of the way to complete the application, arrange the loan, and distribute the money.