Many times in life, you may come across situations that may demand an urgent need of money. However, when people face such situations, they ask for funds from family and friends. But, you may not get help all the time, and the desired amount may not be in anyone’s capacity to provide.
The next immediate thing that people resort to is applying for a personal loan and fulfilling their needs. However, availing a personal loan to cover needs may lead to paying a higher loan EMIs. It is because the personal loan interest rate is higher.
Thus, instead of paying a high amount + interest amount as EMI when availing the personal loan, you can now apply for a loan against shares facility. Yes, if you made some investment in shares, you can easily use it as collateral to acquire a loan.
A majority of known banks and non-banking finance companies (NBFCs) offer this facility. It will help to help investors with an immediate need for money. The loan against shares interest rate is always lower because it’s a secured loan.
As the name suggests, the loan against shares is offered when you pledge your invested shares as collateral or security. Since it becomes a secured loan, the loan against shares interest rate offered is lower, making it easier to manage.
If the minimum value of your portfolio is at least Rs.10 lakh, then you may be eligible to apply for a loan against shares and borrow up to Rs.10 crore.
A quick view at the loan against shears eligibility
Talking about the eligibility terms, let’s know more about the eligibility conditions that you need to fulfil while applying for the loan:
- You need to be a residing Indian citizen and not an NRI
- The age of the applicant should be at least 21 years on the day of application
- He/she should have a regular source of income – self-employed/salaried
- The minimum value of your shares should be Rs.10 lakh
Loan against shares documents that you need to arrange
Your eligibility for the loan against shares will be complete when you arrange some basic yet essential documents such as:
- Your ID proofs
- Address proofs
- Salary Slips
- The documented proofs of having invested in shares
- Recent coloured and passport size photographs
What benefits can you enjoy while applying for it?
When you apply for a loan against shares, you may come to experience many rewarding benefits from a lender.
Take a look:
- A large loan amount – Based on the value of your portfolio, you can borrow as higher as up to Rs.10 crore to fund many personal and professional needs.
- Dedicated Relationship Manager – Do you have any queries related to the loan against shares account? Lenders appoint a dedicated Relationship Manager to help all resolve all queries 24/7 and as and when needed.
- No charges for making part prepayment/foreclosure – Are you willing to make some part prepayment or foreclose the loan account? You can do so before the end of the tenor. For this, he/she is not required to pay any charges.
- Online account management – Lenders let you track all loan details via their digital customer portal. As a result, you can access your loan related information right from anywhere and 24/7.
- Wide list of approved securities – Not just shares, but you can apply for a wide range of securities approved by lenders. Some of the approved lists of securities include shares, mutual funds, insurance policies, ESOPs, IPOs, and FMPs. They could be accepted as collateral and help you avail a loan against at a lower interest rate.
If you are all set to apply for a loan against shares, you can do that online by visiting the website of your prospective lender.