As the old saying goes, “money talks” and investing in securities is a wise way to make your money speak volumes. With benefits like diversification, long-term growth, and additional income streams, it is no wonder why so many investors turn to securities.
But did you know that it can also help you get funds when you need them the most? That’s right!
As an investor, you work hard to build a portfolio that generates returns, but have you ever considered using it to raise funds for your business ventures or personal projects?
Introducing the world of Loan Against Securities (LAS) – a convenient and flexible way to access the capital you need while keeping your investments intact.
LAS is an ideal financing option for investors who require additional liquidity without selling their securities and triggering tax implications. This is especially beneficial for investors who believe in portfolio loans for their business overdrafts or passion projects.
For such investors, the need for additional funds arises frequently, and selling securities for each instance can be impractical and expensive. However, with LAS, you can maintain their investment portfolios while using them as collateral to secure loans. This way, you can maintain the diversification of your portfolio and avoid the hassles and costs associated with buying and selling securities.
With LAS, by pledging your investments as collateral, you can easily secure a loan with some of the most trusted lenders in the industry. By using LAS, you can take advantage of the value of your securities while retaining ownership and enjoying the benefits of a diversified portfolio. It is certainly a win-win situation for you if you wish to grow your wealth and finance your dreams at the same time.
Talking about its typical features, in loans against securities, the loan amount is typically a percentage of the market value of your securities, and the interest rates are usually lower than unsecured loans.
Some of the Key Features of a Loan Against Securities are:
- Loan amount: You can borrow up to 50-70% of the market value of your securities, depending on the lender’s policy.
- Eligible securities: You can pledge a variety of securities such as stocks, mutual funds, bonds, and debentures.
- Tenure: The tenure of a loan against securities is usually shorter than other types of loans, typically ranging from 1 to 5 years.
- Interest rate: The interest rate on a loan against securities is generally lower than unsecured loans, and the interest is charged only on the amount you withdraw.
- Repayment: You can choose to pay only the interest during the loan tenure and repay the principal amount at the end of the tenure.
- Quick disbursal: The loan against securities can be disbursed quickly, usually within 2-3 working days, after the lender verifies the securities’ authenticity.
While LAS offers several benefits as discussed, as an investor, one of the most significant advantages that you may seek is the quick turnaround time.
The process of availing a loan against securities is relatively simple and hassle-free. You need to submit the necessary documents, including the securities’ valuation report and KYC documents, to the lender. The lender then verifies the securities’ authenticity and disburses the loan amount into your account within a few working days. This means that you can get access to immediate cash without having to liquidate your investments.
Unlike traditional loans that involve lengthy approval processes and stringent credit checks, LAS has a straightforward application process with minimal documentation. The entire process can be completed within a few days, making it an ideal solution for investors who require funds for their business ventures, passion projects, or any other purpose that requires quick cash flow.
Moreover, unlike traditional loans, LAS does not require the borrower to specify the end-use of the loan amount. As long as the borrower meets the eligibility criteria and pledges the required securities, they can use the loan amount for any purpose they see fit, whether it is to fund a new business or purchase a luxury car.
Now several lenders offer a loan against securities, and it can be overwhelming to choose the right one.
Here are Some of the Most Trusted Lenders in the Industry that you can consider:
- Banks: Most banks in India offer a loan against securities to their customers. The advantage of getting a loan from a bank is the lower interest rates and the assurance of credibility.
- NBFCs: Non-Banking Financial Companies (NBFCs) are another popular choice for getting a loan against securities. They offer quick disbursals and flexible repayment options.
- Financial Services Distributors: You can also opt for the personalized financial distribution services as offered by Rurash Financials, who help you in facilitating loan against securities from the most trusted lenders in the industry, like Tata Capital, BNP Paribas, Bajaj Financing, Yes Bank etc.
Rurash Financials can help you find trusted lenders that bring Quick and Secured Financing, with interest rates as low as 9% the lowest processing charges, and the ability to choose or change pledged securities. Only pay interest on the utilized loan amount and prepay without additional charges.
Plus, enjoy an exhaustive list of over 800 approved securities, multiple lender options, and easy documentation. All are backed by a designated relationship manager and the ability to fund large loans.