Loans
When you need money urgently, opting for a Personal Loan is your first instinct. Due to the unsecured nature of this loan, lenders may insist that you fulfil their pre-approved eligibility criteria to qualify. The lender may reject your application if you cannot produce the required credit score or if your monthly income is lower than the required range. However, you need not lose hope, as you can obtain a Loan Against Securities. Let us understand what such a loan entails, its features, and why it is an excellent substitute for a Personal Loan.
A Loan Against Securities, as is apparent from the term, is a loan you can obtain by pledging your shares and other market securities as collateral. This is a secured loan under which the lender takes possession of your securities, such as shares, mutual funds, bonds, life insurance policies, NSC/KVP, etc., and determines the loan amount based on the securities pledged. This convenient loan is sometimes called a Loan Against Shares or a Loan Against Securities, especially if you have pledged shares or financial securities.
Lenders typically do not set any fixed eligibility criteria for a Loan Against Securities. You need not bother with or comply with factors such as your age, employment status, or monthly income. Lenders do not ask you to provide your credit score to determine repayment capacity. The eligibility criteria for a Loan Against Securities are quite straightforward. You must have enough securities to pledge to acquire the loan amount you need. You can obtain the loan easily if you can pledge your securities as collateral.
Another reason to consider a Loan Against Shares and Securities is that you can get a high loan amount without any specific limitations. You can obtain anywhere from 50% to 80% of the current market value of your shares, mutual funds, life insurance policies, non-convertible debentures, and other such assets, depending on the securities you pledge.
An excellent attribute of a Loan Against Securities is that you can get quick disbursal of funds. Most lenders offer doorstep services and process your loan quickly. You need to provide copies of your investments pledged along with basic ID, address, and signature proof documents. You can provide these documents online since the entire process is automated and digital. Once lenders finish assessing the total value of the securities pledged, they disburse the loan amount directly into your account.
The interest rate for a Loan Against Securities is usually low since the bank has some form of collateral in the securities pledged. Moreover, you do not have to worry about paying interest on the entire loan amount. Instead, the lender only levies interest on the actual loan amount you use. They also calculate interest on the daily outstanding amount and debit it from your account at the end of each month during the loan period.
A Loan Against Securities comes without any end-use restrictions. You can use funds from the loan to finance any need you may have, except for speculative purposes like share market investments. As such, you can pay for medical emergencies, fund business expansion, cover leisure expenses, and so on without providing any reasons to the lender.
Now, you can pledge your securities with HDFC Bank and obtain quick financing on the go. The low interest rates, efficient servicing and digital documentation process make a Loan Against Shares a convenient option when you need funds urgently. Click here to apply.
Are you eager to learn about the benefits of a Digital Loan against Mutual Funds? Click here.
Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.