LOAN AGAINST SHARES

With Loan Against Shares, you can get a loan by pledging your shares or securities. Loans are useful credit options when we need cash in an emergency.

What is a loan against shares?

A loan against shares is a type of loan that allows you to borrow money by pledging your existing stocks or shares as collateral. In simpler terms, it’s a loan where you can keep your investments while accessing funds when you need them.
The value of the loan depends on the market value of the pledged securities at the time of borrowing. The lender will usually lend up to 50%-60% of the current market price of the shares.

This type of lending is beneficial for individuals who require quick cash without having to sell their valuable assets like stocks and bonds. It’s also ideal for businesses looking for immediate funding without jeopardizing their long-term investment strategies.

Moreover, interest rates on loans against shares are typically lower than personal or business loans due to the collateral provided by borrowers in this case. Loan against shares offers an attractive option for those who want quick access to funds without selling off their investments.

Features of loan against shares

A loan against shares is a convenient way for individuals to get financial assistance by pledging their securities. Here are some of the key features of loan against shares:

Loan Amount

The loan amount for loans against shares depends on the value and quality of the pledged securities.

Interest Rate

The interest rate for a loan against shares is generally lower than other types of loans since it’s secured by collateral.

Tenure

The tenure ranges from 12 months to 36 months, depending on the lender’s policies and terms.

Margin Requirement

Lenders usually require borrowers to pledge securities with a margin ranging from 25% to 50%. This ensures that lenders have enough security in case there is any fluctuation in share prices.

Prepayment Charges

Some lenders may charge prepayment penalties if you choose to foreclose your loan before its due date.

Flexibility in Repayment Options

Borrowers can pay off their loans through EMIs or choose the bullet repayment option as per their convenience within the prescribed time limit.

These features make taking out a loan against shares an attractive option for people looking for financial assistance while keeping their assets intact at the same time.

What is the Eligibility for Loan Against Shares?

To apply for a loan against shares, you must meet the following criteria: