A loan against securities can be a convenient way to access funds quickly. By pledging assets like stocks, bonds, or mutual funds, you can obtain a loan without selling your investments. This can be particularly useful in times of financial need or for investment opportunities. In this guide we will delve into variants of Loans against securities: Loan Against Shares, Loan Against Mutual Funds, Loan Against Fixed Deposit, Loan Against Bonds, and Loan Against Insurance Policy,

Loan Against Shares

Unlock the potential of your investments to secure a loan against shares of up to ₹1,000 Cr crore with minimal documentation. Enjoy the convenience of a pre-approved credit limit, allowing you to borrow as per your need and pay interest only on the amount utilised.

Features:

• Pre-approved limit: Get a pre-assigned loan limit of up to ₹1,000 Cr with minimal documentation (3 documents).
• Wide share acceptance: Borrow against a wide range of shares (over 1000+) for up to 50% of their value. (Check approved list)
• Flexible repayment: Choose a convenient tenure from 7 days up to 36 months.
• Continued dividends: Keep earning dividends on your pledged shares throughout the loan term.
• Interest on utilised amount: Pay interest only on the amount you withdraw, not the entire sanctioned limit.
• Dynamic loan limit: Enjoy an increase in your pre-approved limit if your share value rises (and vice versa).
• Dedicated online portal: Manage your loan online with the My Account portal (download statements, release shares etc.).

Benefits:

• Unlock liquidity: Access funds without selling your investments.
• Retain ownership: Maintain control of your shares and benefit from potential future growth.
• Manage cash flow: Choose a repayment plan that suits your financial needs.

Considerations:

• Eligibility: You must be an Indian citizen, aged 18-90 years, with a minimum portfolio value of Rs. 50,000 (salaried or self-employed).
• Interest rates: Up to 20% per annum.
• Fees: Processing fee (up to 4.72%), prepayment charges, annual maintenance charges, bounce charges, and potential legal fees.
• Market risk: If share value falls significantly, you may need to provide additional collateral or repay part of the loan.

Loan Against Bonds

A loan against bonds is a flexible financing option that allows you to borrow money using your bonds as collateral. This means you can access funds without having to sell your bonds, preserving your investment potential and continued returns. It's a convenient way to raise capital for various needs like home renovations, medical expenses, or business expansion.

Features:

• High loan amounts: Borrow up to ₹1,000 Cr without selling your bonds.
• Pre-approved limits: Get pre-approved offer of up to ₹1,000 Cr.
• Wide bond acceptance: Choose from a vast list of approved bonds for up to 95% of their value.
• Interest-only payments: Pay interest only on the amount you've withdrawn.
• Flexible tenure: Select a convenient repayment term from 7 days to 36 months.

Benefits:

• Access funds: Meet financial needs without selling your investments.
• Preserve investments: Maintain ownership of your bonds and their potential growth.
• Cost-effective: Pay interest only on the utilised amount.
• Flexibility: Choose a repayment plan that suits your needs.

Considerations:

• Interest rates: Interest rates may vary based on market conditions and your specific profile.
• Collateral value: The loan amount is typically determined by the market value of your bonds.
• Market risk: Fluctuations in bond values can impact the loan amount and repayment terms.
• Fees: Be aware of potential processing fees, prepayment charges, and other applicable fees.
  

Loan Against Insurance Policy

A loan against insurance policy allows you to borrow money using your insurance policy as collateral. This means you can access funds without having to surrender your policy, preserving your insurance coverage and investment benefits. It's a flexible financing option for various needs like home renovations, medical expenses, or business expansion.

Features:

• High loan amounts: Borrow up to ₹25 crore against endowment and ULIP policies.
• Loans during lock-in: Access funds even if your policy is under a lock-in period.
• Intact coverage: Maintain your insurance coverage while accessing funds.
• Flexible loans: Enjoy a flexi loan with multiple withdrawals and interest on utilised amounts.
• Deferred interest: For policies under lock-in, pay interest after the lock-in period.

Benefits:

• Access funds: Meet financial needs without surrendering your policy.
• Preserve coverage: Maintain your insurance protection.
• Flexibility: Choose a repayment plan that suits your needs.
• Deferred interest: Potential savings on interest payments for policies under lock-in.
• Pre-approved limits: Get pre-approved for up to ₹25 crore.

Considerations:

• Interest rates: Interest rates may vary based on market conditions and your specific profile.
• Collateral value: The loan amount is typically determined by the surrender value of your policy.
• Repayment terms: Understand the repayment schedule, including interest rates and potential prepayment charges.

Policy terms: Ensure your policy meets the eligibility criteria for a loan.

Loan Against Mutual Funds

A loan against mutual funds allows you to borrow money using your mutual funds as collateral. This means you can access funds without having to sell your mutual funds, preserving your investment potential and continued returns. It's a flexible financing option for various needs like home renovations, medical expenses, or business expansion.

Features:

• High loan amounts: Borrow up to ₹1,000 Cr based on your fund values.
• Pre-approved limits: Get pre-approved for loans based on your portfolio.
• Wide fund acceptance: Choose from over 5000+ funds from 40+ AMCs.
• Interest-only payments: Pay interest only on the amount you've withdrawn.
• No fund sale: Maintain ownership of your mutual funds and their potential growth.
• Flexible tenure: Select a convenient repayment term from 7 days to 36 months.

Benefits:

• Access funds: Meet financial needs without selling your investments.
• Preserve investment potential: Maintain ownership of your mutual funds and their growth potential.
• Cost-effective: Pay interest only on the utilised amount.
• Flexibility: Choose a repayment plan that suits your needs.
• Online management: Conveniently manage your loan through an online portal.

Considerations:

• Interest rates: Interest rates may vary based on market conditions and your specific profile.
• Collateral value: The loan amount is typically determined by the market value of your mutual funds.
• Market risk: Fluctuations in fund values can impact the loan amount and repayment terms.
• Fees: Be aware of potential processing fees, prepayment charges, and other applicable fees.