It is much easier than ever to obtain a loan against security nowadays, mainly because lenders offer the funds digitally, which takes just a few minutes to receive ready-to-use funds in your account.
Loans against securities are secured loans that can be obtained with only your financial assets in your portfolio, and they can be used to meet almost every need in our daily lives. It is one of the most popular types of loans, particularly among young and middle-aged individuals.
To maximize returns in a short period of time, many investors take out a loan against security in order to invest in the equity market.
What is a loan against securities?
By pledging your investment securities to a lender, you can obtain a loan from a bank or a non-banking financial institution. In an emergency when you need funds urgently, it is a simple alternative to selling shares, mutual funds, bonds, etc., in a hurry.
You can secure the funds you need by pledging these instruments as collateral. Based on the value of the securities pledged, the lender determines the principal amount you can acquire.
Similar to a loan against property, the loan principal is usually a specific percentile of the securities pledged. Moreover, the interest rate of a loan against securities is determined by how long you choose to repay the loan.
Why you should take loan against securities to invest in the stock market
Here are a few reasons why investors consider taking a loan against securities for investments:
In terms of end-use, there are no restrictions:
It is common for loans to have a specific purpose for which they can be used. A car loan, for instance, can only be used to buy a car and not for vacations. However, there are no such restrictions on the usage of a loan against security.
The borrower can use the loan against securities amount for almost anything as long as it is legitimate. This amount can be used for your needs such as child’s education or wedding, home renovation, buying an expensive item, or investing it further to earn returns, etc.
Near and Dear Collateral is not required:
A loan against securities simply requires you to pledge the financial assets you have in your portfolio, such as equity shares, bonds, mutual fund units and more, so you will not have to put your near and dear physical assets as collateral.
Quick and Easy Loan Process:
When investing in the stock market, investors usually need funds immediately. The loan against securities and shares can provide them with funds quickly and easily in this situation. In some cases, a property valuation or evaluation of a financial instrument is required, which can delay the loan application process.
You will earn higher returns if you invest more money. In order to maximize returns within a short period, many investors borrow money. A loan against security can be offered up to a maximum of Rs 100 Crore (Rurash Financials help you in availing a loan from Rs 5 lakh to Rs 100 Crore), depending on your profile and repayment capacity.
Features of Loan against securities
Higher loan amounts
The minimum amount for a LAS loan is Rs 500,000, whereas the maximum limit is Rs 100 crores. Rurash Financials can assist you in getting a loan against security from loan amount Rs 5 Lakh to Rs 100 Crores, depending upon your need.
Overdraft and interest
Loans against securities are similar to overdraft loans, and interest is only assessed on the funds taken out of your account, not on the funds borrowed.
It can also be used as a personal loan:
LAS loans feature the advantage of being able to fund any personal expenses you may have. This loan, however, has a significantly lower interest rate than a personal loan. As well, while the loan amount is not restricted in terms of end-use, you may not use the funds borrowed for speculative activities
Transparent transaction process
As far as the loan transactions are concerned, you can rest assured. You can track all your transactions through a separate overdraft account provided by the borrower. Whenever you make a payment, it will appear in the account. All charges associated with loans against securities, including interest rates and processing fees, are also disclosed upfront by lenders.
24×7 account access
It is possible for you to access your loan account at any time, from anywhere in the world. If you need assistance or information regarding the loan, you can contact your lender’s customer service department.
How to apply for the fastest loan against securities?
You can borrow against your investments without going to a financial institution.
Here are the steps you need to follow to borrow against shares or other securities. Step 1: Decide which lender to work with
Taking a loan against shares begins with choosing the right lender. Each lender has its own eligibility criteria, processing fee, and interest rate for loans against securities. Check out which lenders offer the best eligibility and loan offers and visit their websites to apply for a loan. Besides offering the lowest interest rate on the market, Rurash Financials offers processing fees at a discount so that anyone can apply for a loan against securities.
Step 2: Submit an online application
The following information is generally required by lenders when applying for an online loan. By visiting the official website of the lender of your choice.
- Name as it appears on your PAN card
- Email address and mobile number
- The place of residence
- Date of birth
- PAN and Aadhar details
- Portfolio value
- Type of security
Click “Apply” after filling in these details.
Step 3: Complete the KYC process
Many NBFCs in the country require minimal documentation for the KYC process, but the process varies from lender to lender. It is usually necessary to provide a photo of yourself and proof of identification.
Step 4: Funds are received
It’s as simple as that. It usually takes a lender a few hours to process your loan application. As a result, you will be able to meet your financial obligations immediately.
To assist you in obtaining short-term financing, especially when you need funds to invest in the stock market, a loan against shares is an alternative to a personal loan or other instrument without requiring you to place collateral against your personal belongings. In order to obtain immediate access to funds, you can simply swap your shares in your Demat account for shares in your mortgage account.
Rurash can assist you regardless of whether you require financing up to Rs. 100 crores or up to Rs. 5 lacs. A loan officer will be with you every step of the way to finalize the application, process the loan, and disburse the funds.
Rurash Financial Pvt. Ltd. is one of India’s leading investment management firms, providing clients with financial solutions that help them build a legacy and enhance their wealth.
For any guidance regarding financial instruments, Connect with the relationship manager now or write to: [email protected],