Google how to get a loan against shares, and you will be flooded with how-to guides and hundreds of lenders’ websites. It can make it difficult for you to make the right decisions. So, to help, this blog will walk you through everything you need to know about getting a loan against your investment.
Investing your hard-earned money is the foundation stone for attaining long-term financial stability. Investing in securities helps you retain your money’s purchasing power and create wealth over time. At the same time, it provides you with funds for emergencies. The best part about investing in securities is you do not need to sell them if you need instant funds for an emergency. How? To get a loan against shares, you can simply use them as collateral.
Have you invested in the stock market and wondered how to get a loan against shares? Read on to find out.
What is a loan against securities?
If you have been wondering how to take a loan against shares, you will need to get a loan against securities.
A loan against securities allows you to use your shares as collateral against the loan amount. In fact, you are not limited to shares. You can also use securities like mutual funds, bonds, and insurance policies to secure a loan.
A loan against securities has the following benefits:
1. Keep your investment in-tact
Investments are an excellent backup to have for unforeseen situations. But, with a loan against securities, you can settle emergency financial obligations without selling your investments at low market prices and keep them for a lifetime.
2. Overdraft facility
Lenders offer loans against securities as an overdraft facility in your account after you deposit securities. So, you can use the entire amount or a part of it, per your financial needs. Also, you only pay interest on the amount you use and for the duration you use that amount.
3. Multi-purpose loan
A loan against securities is a multi-purpose loan. Hence, there are no restrictions on how you use the loan amount. Whether you need funds for higher education, purchasing a vehicle, or meeting other short-term financial needs, you can rely on loan against securities.
4. Get approval irrespective of your credit score
Credit scores are essential for lenders to judge a loan applicant’s creditworthiness. However, a loan against securities is secured against your investment, providing lenders with a guarantee in case of defaults or late payments. So, they ease credit score requirements, making loan approval easier.
5. Higher LTV ratio on approved securities
Loan-to-Value ratio is the loan amount lenders offer against the value of your investments. Lenders have an approved list of securities that provide loans at a higher LTV ratio. Although, the amount varies across lenders. So, when searching for how to take a loan against shares,also look for lenders who have your shares in their approved securities list.
Now that you know the benefits of getting a loan against securities, let us see how to get a loan against securities.
How to get a loan against securities?
It has never been easier to get a loan against securities than it is today. You can take a loan from financial institutions against your investments without visiting their outlets. Here’s how to get a loan against shares and other securities.
Step 1: Choose a lender
When talking about how to take a loan against shares, the first thing you must do is select the right lender. You have many options to get a loan against your securities, and each lender has a different eligibility criterion, processing fee, and interest rates. So, research the lenders whose eligibility and loan offer suits you the most and go to their website to apply for a loan.
Step 2: Complete a simple online application
The online loan application process may vary depending on the lender, but generally, you have to provide:
- Full Name as on your PAN Card
- Email address and Mobile Number
- Date of Birth
- PAN and Aadhar details
- Portfolio Value
- Type of securities
Fill in these details and click “Apply.”
Step 3: Complete the KYC process
The KYC process also varies depending on the lender, but most NBFCs in the country have a brief process requiring minimal documentation. For the most part, you will need to provide a copy of any one ID proof and a photograph.
Step 4: Get funds in your account
Yes, that is it. Once the lender approves your application, the loan is processed within a few hours. You get instant access to funds so you can settle your financial obligations without delay.
That is all on how to get a loan against securities. A LAS is the best option for you to receive additional funds against your securities without selling your investments.
For an instant loan against your securities, turn to Tata Capital. We offer loan against securities at best-in-class interest rates and zero foreclosure charges. Our online application process has simple eligibility criteria and requires minimal documentation, so loan approval is instant. Visit our website and get a loan against your securities today.