The loan against shares is basically a borrowing facility provided by banks and NBFCs against securities such as trading shares, insurance policy, mutual funds or bonds either by the borrower or his/her relatives. It offers immediate liquidity for taking care of urgent needs while safeguarding one’s investment. The security is only blocked by the lender bank and residue in the borrower’s name. Simply put, one can enjoy certain shareholder perks like dividends, rights, and bonuses. You can get a minimum of Rs 1 lakh loan and a maximum of Rs 10 lakh loan for physical shares, and up to Rs 20 lakh loan for demat shares.

The loan against shares is offered against the following securities:

  • UTI bonds
  • NABARD bonds
  • Non-convertible debentures
  • Insurance policies
  • Mutual funds
  • Demat shares

How does the loan against shares work?

This type of loan facility is provided as an overdraft facility in your account after you have submitted your securities. One can take out the money as per the convenience of the account, and pay interest only for the loan amount used.

What are the things to consider before availing the loan against shares?

Following are few things to look at before taking the loan against shares:

  1. Check the Eligibility criteria

One needs to check the loan against shares eligibility criteria and see if he/she meets it before applying for the loan against shares from various financial institutions. The majority of lenders require the applicant to have attained at least 21 years of age in order to avail this type of loan.

  1. Look for financial institutions which accept diverse investments as security

Before availing the loan against shares, one needs to have a look at various lenders which considers various forms of investment like IPO, insurance policies from partner companies, mutual fund, retail shares, and much more.

  1. Consider the rate of interest

The loan against shares interest rate is charged only for the amount and period for which the overdraft facility is used, and has to be paid each month. Opt for banks and NBFCs which provide a high amount of sanction against your collateral. There are many such lenders who provide high & better loan amount at reasonable interest rates depending on the securities.

  1. Repayment tenure

While availing this type of loan, always opt for the banks or NBFCs which provides flexible repayment tenure. Normally, the repayment tenure period is between 1-3 years. However, the repayment tenure will depend on the loan amount chosen by you.

  1. Prepayment charges for early loan closures

Unlike other types of loans, there are no prepayment charges to close your loan earlier. After the loan is fully paid on time, the financial institution releases all the securities detained.

What are the documents required for the loan against shares?

For salaried individual

  • Identity and address proof
  • Photograph
  • PAN card
  • Previous 6-month bank statement
  • Cancelled cheque
  • Income proof
  • Demat account statement

For self-employed

  • PAN card
  • Identity and address proof
  • Photograph
  • Last 6-month bank statement
  • Cancelled cheque
  • Demat account statement
  • Income proof
  • Balance sheet and P/L account
  • Office address proof and the existence of business proof

What are the benefits you can avail with IndiakaLoan.com?

Following are the benefits you can avail through IndiakaLoan.com for the loan against shares including minimum haircut on bonds/stocks value:

  1. Online access

With an easy online procedure, one can manage his/her account from anywhere and anytime.

  1. Relationship manager

The trusted financial advisor provides a dedicated relationship manager who is available 24*7 to help the client with all the necessary requirements.

  1. Hassle-free application process

You can easily apply for loan against shares through our site. Also, it is the hassle-free way to avail funds without liquidating your assets.

  1. Simple documentation

You do not have to really submit financial documents for this type of loan as the documentation is minimal and stress-free.

  1. Nil part payment/foreclosure charges

With these two, it becomes easier for you to make loan repayment as per your convenience and comfort.

  1. Immediate liquidity

You can easily access cash in hands without abandoning or selling your shares and investments.

  1. No pre-payment charges and short tenures

In case, you want to pay off the loan earlier than the expected time, you will not be charged a prepayment amount. The majority of banks and NBFCs limit the tenure, which can be lowered or increased as needed thereafter.

For any further query related to loan against securities, call us at +91-9650899903 or email at info@indiakaloan.com