What is Loan Against Securities? How can i get Loan against my Shares?

Loans Against Securities is available in the form of an overdraft facility which is pledged against financial securities like shares, units, and bonds. Loan Against Shares/Bonds/Mutual Funds is basically a loan wherein you pledge the securities you have invested in as collateral against the loan amount. A Loan Against Securities is the best way to make your investments work harder and smarter for you.

An equity share is commonly called a share that represent a part of the ownership of a company. Here, every shareholder is a partial owner of the company and earns dividends based on the performance of the company.

Loan Against Shares is a convenient and easy way to avail high-value loans at affordable interest rates. In this type of loan, you can pledge your shares as equity to avail funds of up to 50-60% of their value of your shares. 

What is the interest rate for a loan against shares?

General Interest Rate range against securities between 10-12% but every bank has different interest rates and terms and conditions. Read T&C before apply for the Securities Loan.

Features of Loan against Shares

1-The loan provided against shares includes stock exchange securities.
2-The security provided acts as a protection for the loan.
3-If the borrower fails to make a payment, then the lender can dispose the security and realize the debt.
4-Secured advances offer a sense of safety to the lender as the amount lent can be regained.
5-Loans offered against shares include stock exchange securities such as government securities, corporate securities, and debentures.

How to Get a Loan on Shares?

Loan against share is offered against listed securities. Investors can borrow funds against existing investment portfolios to meet investment and liquidity requirements. The money that the borrower has invested in can get him a loan. Most often people invest in shared as it is a popular method of short and long-term investment. The securities acceptable differ from lender to lender and the lenders usually have a list of securities that they choose from. It is simply to ensure that the lender will not incur a loss.

Advantages of offering shares as Security

The advantageous part of pledging your securities is one that you are able to get steady cash easily at the time you need it most and secondly you would not be devoid of the benefits as a shareholder. This means that you can enjoy your rights of receiving dividends and bonuses along with gaining from the price movements in the shares for which you have availed the loan from the bank.

 

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