Loan against shares is a popular financial product that allows investors to unlock the value of their shareholdings without selling them. This can be a useful tool for accessing funds without selling your shares. However, it's crucial to understand the eligibility criteria, interest rates, and repayment terms before applying for such a loan. While there isn't a specific calculator for this, the information provided in this guide can help you assess your eligibility and make informed decisions.
What is a loan against shares calculator?
A Loan Against Shares (LAS) Calculator is a financial tool used to estimate the amount of loan a person can get against their shares. It considers various factors such as the current market value of the shares, the loan-to-value ratio (LTV), and the interest rate offered by the lender.
To use the calculator, one needs to input details such as the type and quantity of shares held, their current market price, and the margin or LTV ratio specified by the lender. Based on these inputs, the calculator computes the maximum loan amount that can be availed against the shares.
This tool is beneficial for individuals looking to leverage their shareholdings for additional funds without selling their shares. It helps them understand the borrowing capacity against their shares and plan their finances accordingly.
Moreover, by using the calculator, borrowers can compare different loan options offered by various lenders and choose the one that best suits their requirements in terms of loan amount, interest rate, and tenure.
Benefits of Loan Against Shares eligibility calculator
Bajaj Finserv's loan against securities eligibility calculator offers several key benefits:
- Quick and easy assessment: The calculator provides a rapid assessment of your loan eligibility based on your stock holdings.
- Accurate loan amount estimation: By inputting the stock name/ISIN and quantity, the calculator provides an accurate estimate of the loan amount you can potentially avail.
- Informed decision-making: This information empowers you to make informed decisions about applying for a loan against your shares, knowing your borrowing capacity beforehand.
- Time-saving: The calculator eliminates the need for manual calculations and saves you time and effort.
- Convenience: The online tool is easily accessible and can be used from anywhere with an internet connection.
By utilizing this user-friendly tool, you can quickly determine your loan eligibility and plan your financial strategies accordingly.
Loan against shares eligibility calculator
To be eligible for a loan against shares, borrowers must meet certain criteria set by lenders. These criteria typically include the following:
- Ownership of shares: Borrowers must be the rightful owners of the shares they wish to pledge as collateral.
- Age: Borrowers must be of legal age, usually 18 years or older, to be eligible for a loan against shares.
- Creditworthiness: Lenders may assess the borrower's creditworthiness based on factors such as credit score, income, and repayment history.
- Loan-to-value (LTV) ratio: Lenders may have a maximum LTV ratio, which determines the maximum loan amount based on the value of the pledged shares.
- Other documents: Borrowers may be required to submit identification proof, address proof, income proof, and details of the shares to be pledged.
How to use the calculator and what factors it considers
Using Bajaj Finserv's loan against securities eligibility calculator is straightforward:
- Add your stock name: Enter the name or ISIN (International Securities Identification Number) of the stocks you own.
- Add units of stock: Specify the number of units you hold for each stock.
- Add scrips: You can add multiple scrips to calculate the loan eligibility for your entire portfolio.
The calculator then considers the following factors to determine your loan eligibility:
- Current market value of your stocks: The calculator fetches real-time or near real-time market data to determine the current value of your stock holdings.
- Loan-to-Value (LTV) ratio: The calculator applies a specific LTV ratio, which represents the percentage of the stock value that can be loaned against. This ratio may vary depending on factors like stock volatility and market conditions.
- Other factors: The calculator may also consider other factors, such as the creditworthiness of the borrower and the overall market conditions.
By considering these factors, the calculator provides you with an estimated loan amount that you can potentially avail against your stock portfolio.
Documents required for Loan Against Shares
- KYC documents: Aadhaar/ passport/ voter’s ID/ driving license/ Letter of National Population Register/ NREGA job card
- PAN card
- DEMAT holding statement
How to apply for a loan against shares?
- Choose a lender: Research and select a lender who offers loans against shares. Compare interest rates, terms, and other features.
- Check eligibility: Ensure you meet the lender's eligibility criteria, including ownership of shares and creditworthiness.
- Gather documents: Collect all necessary documents, including identification proof, address proof, income proof, and details of the shares to be pledged.
- Use loan against shares calculator: Use a loan against shares calculator to estimate the loan amount you can avail of based on the value of your shares.
- Fill out application form: Fill out the loan application form provided by the lender. Provide accurate details and attach all required documents.
- Valuation of shares: The lender will assess the value of the shares you wish to pledge and offer a loan amount based on a certain percentage of this value.
- Pledge of shares: After approval, you will be required to pledge the shares by signing the necessary documents and transferring the shares to the lender's Demat account.
- Disbursement of funds: Once the shares are pledged, the lender will disburse the loan amount to your bank account.
- Repayment: Repay the loan as per the agreed schedule, including principal and interest payments. Failure to repay may result in the lender selling the pledged shares to recover the loan amount.
- Regular monitoring: Monitor the performance of your pledged shares and the loan account regularly to ensure compliance with the terms of the loan.
Conclusion
A loan against shares calculator is a valuable tool for borrowers looking to avail funds against their shareholdings. By providing an estimate of the loan amount and EMI payable, this calculator helps borrowers plan their finances effectively. Additionally, understanding the eligibility criteria and the application process for a loan against shares is essential for a smooth borrowing experience.
