Emergencies, be it personal or business related can come knocking on your door unannounced. Although emergency funds act as the critical safety net for covering your immediate needs. However, an immediate and unanticipated expense can deplete your savings and impact your financial health. In such cases, people often think of liquidating their financial assets or pledging their assets, such as a loan against securities. The term “Loan against security” refers to a loan secured by securities, which serve as collateral for the loan. A loan against securities is typically short-term and of a modest amount.
If you’re unaware of how a loan against securities works, here are a few frequently asked questions to get you started.
With a loan against security, you can quickly access the funds you need. Applicants need only complete a simple application form, which only takes a few minutes. Additionally, you may be required to upload some essential documents such as basic KYC documents, along with documents related to your financial securities. Rurash Financials can help you get your loan in a more personalized manner by connecting you with credible lenders such as Tata Capital, Sharekhan by BNP Paribas, Bajaj Finance, Yes Bank and more.
A loan against securities can help you unleash the true potential of your investments. Most major lenders, whether banks or NBFCs, will lend up to ₹20 lac against your shares and other financial securities; the maximum loan amount is usually 50–60% of the market value of the securities you pledge. Rurash Financials can help you get loan amounts up to 80% of the market value of the securities you pledge, and you can get funds for any requirement from ₹10 lakh to ₹100 Crore quickly through us.
A loan against securities is available for individuals, HUFs (Hindu Undivided Families), NRIs, private and partnership firms, sole proprietorships, and public limited companies.
Taking a loan against securities has multiple unique benefits:
- Easy and faster transfer of funds.
- The ownership of your securities stays with you
- Appreciation in the value of your securities will help increase your drawing power.
- With Rurash Financial, you get personalised assistance to avail the optimum loan plan based on your bespoke requirements from major credible lenders.
Yes, you can avail of limits by pledging even only one security/ stock if it is from the approved list of scrips. Rurash Financials can help you loan against security by pledging any security/scrip from a list of 800+ approved securities.
The majority of lenders give you a drawing power of up to 50% of the market value of the securities you pledge. The minimum loan amount usually is Rs 5 Lakhs, and the maximum amount generally is Rs 20 Lakh. The loan can be renewed at the end of 1 year. However, Rurash financials can assist you in getting a loan for any amount between Rs 10 Lakh to Rs 100 crore, for up to 80% of the market value of the securities pledged.
Interest rates typically range from 12 to 15%. Depending on the bank, the rate may vary. In most cases, 2% of the loan amount is charged as a processing fee. Interest rates may seem high, but with the bespoke assistance of Rurash Financials, you can take a loan from credible lenders at a rate of interest as low as 8.5%.
Lenders often charge a processing fee which usually varies from 0.5% to 2% depending on the loan amount. At the same time, it depends on a number of other factors.
With the application for a loan against securities, the following documents must be submitted:
- Photo Identity Proof
- Address Proof
- Bank Statements
- Securities Proof
- 2 Recent passport-size photographs
- Security Cheques
- Statement of Holding
Loan against security can be given against all major financial securities, including
- Insurance policies
- Non-convertible debentures
- NABARD Bonds
- UTI Bonds
- Mutual funds
- Demat shares
- National Savings Certificates or KVP are accepted in Demat form only
Rurash Financials has a list of 800+ Pre Approved securities that can be pledged, so you do not need to worry about what all securities are acceptable.
Yes. You can make partial payments in advance against the loan against securities; also, there is no foreclosure or pre-payment penalty for advanced repayment.
If your query is not answered here or you have a few more questions to ask, you can easily reach out to our Relationship Manager at Rurash Financials. You can write to us at email@example.com or you can call/Whatsapp on +91 85915 07808.