LOAN AGAINST SHARES
What Is A Loan Against Securities?
Loan Against Securities (LAS) is a kind of overdraft facility that allows you to pledge your securities as collateral to avail a loan. It is an easy way to receive a line of credit without selling your securities during a market downturn. Now leverage your investment capacity and receive a loan up to 80 per cent on a wide range of financial instruments.
Enjoy instant liquidity without any foreclosure charge and pay interest only on the amount you have used. Loan against securities is a unique financial service that allows you the dual advantage of maintaining ownership on your investment and at the same time reaping their benefits.
Types Of Collaterals For LAS
- DEMAT and physical shares
- Non-convertible debentures (NCD)
- LIC policies
- NABARD and UTI Bonds
- Mutual fund units (not exempt from capital gain tax)
- National Savings Certificate (NSC)
- Kisan Vikas Patra (KVP)
- Gold deposit certificates
Why Use Loan Against Securities?
Using loan against securities offers you a wide range of benefits.
- You retain the ownership on your investment
- You continue to receive the benefits like dividend and bonus on your investment
- Loan against securities allows you to receive a high loan value, up to 80 percent of collateral deposited
- Quick eligibility, without an additional document or proof of income, and easy renewal
- Add instant liquidity, improves your investment potential manifold
- Flexible repayment facility and penalty-free foreclosure
- With an easy online application process, now apply for LAS anytime. There is no need to visit a branch
Features Of Loan Against Shares
Loan against shares is a secured form of loan forwarded against the securities held in your account. Following are the key features of loan against securities.
- Volume of the loan: Loan amount can go up to 80 percent of the collateral value.
- Loan against securities interest rate: The interest rate is between 12 to 16 percent.
- Tenure: The loan tenure is typically one year, but you can also foreclose or extend it.
- Loan against shares eligibility: Indian resident individuals, HUFs (Hindu Undivided Families), NRIs, private and partnership firms, sole proprietorship, and public limited companies are eligible to receive a loan against securities.
- Charges: There are initial processing fees, including AMC, stamp duty, and the like. Also, there could be additional costs in case of an overdraft.
BENEFITS
- Buy shares without selling long-term investments
- Investment opportunities
- Easier and faster processing
- Loan with easy renewal facility
- Dividends and other corporate benefits like bonus
- Appreciation in securities value allows boost in drawing power