Loan Against Bonds

The maximum tenure for a loan against bonds can vary among lenders. Bajaj Finance Limited, for instance, offers a range of repayment options starting from 7 days and extending to 36 months. The specific loan tenure available to you may depend on the lender's terms and your eligibility.

If all documents are in place, the loan can be processed and disbursed within 24 to 48 hours. Some lenders offer same-day disbursal for pre-approved applicants.

You pledge eligible bonds as collateral to the lender. Based on their value, a loan is sanctioned, usually up to a fixed Loan-to-Value (LTV) percentage. The bonds remain in your name but are lien-marked.

Interest rates typically range between 8% to 15% p.a., depending on the lender, bond type, and loan amount. Rates are usually lower than unsecured loans due to the secured nature of the loan.

Yes, you can prepay the loan either partially or fully. Some lenders may charge nominal foreclosure or prepayment fees, while others allow it at no extra cost. Always check the loan agreement.

Yes, you continue to receive any interest, dividend, or coupon payments on the bonds. However, any bonuses or rights issues may be subject to the terms of the pledge.

If bond value drops significantly, the lender may ask for additional collateral or partial repayment to maintain the Loan-to-Value ratio. This is known as a margin call.

Loans can start as low as Rs. 25,000 and go up to Rs. 1000 crores, depending on bond type, quantity, and lender policy. HNIs can typically access larger loan sizes.

Yes, pledged bonds remain in your name. You continue to receive dividends and interest. However, any corporate actions like bonuses may be governed by the lender's lien agreement.

Your loan ROI is based on the interest rate and tenure. Effective cost may also include processing fees or maintenance charges. Lenders usually offer overdraft or term loan structures.

Interest is charged only on the amount utilised, especially in overdraft-linked facilities. For term loans, interest is calculated on the entire disbursed amount, typically on a monthly reducing balance.

LTV is usually up to 95% depending on the bond type and issuer. It’s calculated as:

Loan Amount ÷ Market Value of Bonds × 100.

Check bond eligibility, LTV, interest rate, processing fees, and repayment flexibility. Ensure you understand terms like margin calls and overdraft usage, especially if you're using an OD structure.