4 Things to Consider Before Applying for a Loan Against Securities

As per a report by many leading survey companies, by the end of 2018, India’s equity market is set to become the 5th largest globally. It is evidence which is showing an upward trend in the equity market. A large number of people is putting their money in securities instead of relying only on savings.

When you opt to keep your money in the securities, you not only gain from the higher ROIs that they will get, they also increase your net worth. Other than these benefits, there is another way securities can help you. If you need some urgent money for short-term, you can keep the securities as collateral to get a loan at a lower rate.

What is the loan against securities?
The facility is known as the loan against securities. As the name suggests, when you apply for a loan against securities, your securities are kept as security by lenders. Based on the value of your securities, you can get a higher loan value to help fulfil many personal and professional needs.

Pledging your securities does not mean that you have sold them to the lender; instead, it’s only kept as collateral. You continue getting the benefits of being a security holder such as dividends, bonuses and rights.
Want to apply for a loan against securities? Consider 4 points first!

1)Go for a lender offering a high loan amount
Did you know that applying for the loan against securities with some of the leading online lender can let you raise funds worth crore of rupees? Hence, it’s advisable to research about the best lender in the market that can offer you the maximum value of your holdings. Some of the known names in the lending industry can also let you borrow as high as up to Rs.10 crore. You can even get approval in 24 hours and fund disbursement in 48 hours.

2)Ensure that your securities fall under the lender’s approved list
Lenders have a prescribed set of securities that they can keep as collateral and offer the loan against securities facility. As a result, you would need to know if your securities are eligible to be held as collateral and can provide you with the loan. Most of the leading lenders let you pledge shares, bonds, mutual funds, FMPs, IPOs, ESPOs, insurance policies to grab the loan.

3)Match the eligibility terms and furnish required documents
To qualify and to apply for a loan against securities in India, you need to prove your eligibility and furnish some documents. Here’s a quick look at some standard eligibility and document list for applying for the loan against securities facility.

1)You need to be a citizen of India
2)Your age should be at least 21 years
3)Either self-employed or salaried, you should have a consistent flow of income
4)The minimum worth of your portfolio should be at least Rs.10 lakh
5)Address and ID proofs
6)Income proofs such as Salary Slips
7)Equities’ documented proofs
8)Recently clicked colour passport size photograph

4)Apply online
Why should you take the pain of visiting a lender and waste your time when you can easily apply online and save you time? Yes, applying for the loan against securities helps save your time and many lenders extend the facility to ease off application.

To apply online with a lender, you will need to fill out an online application form. You will need to feed your name, age, the city of residence and mobile number. You will also need to provide information about the type of security that you wish to pledge.

What are you waiting for? If you have invested in securities and needed some money at the lower rate, it’s time to go for the loan against securities facility.

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