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Loan Against Shares & Mutual Fund; Why Use Loan Against Securities?

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Loan Against Securities (LAS) is a type of overdraft that allows you to use your investments as collateral instead of selling them during market downturns. Now you can protect yourself from any unforeseen occurrences by taking out a loan secured by your assets. Apply for a loan against stocks to get fast cash without having to worry about foreclosure.

 

Why Use Loan Against Securities?

Why Use Loan Against Securities?

You keep ownership of your investment and continue to get benefits like as dividends and bonuses from it. A loan against securities allows you to receive a large loan amount, up to 80% of the deposited collateral. Easy renewal and quick eligibility without the need for an extra document or evidence of income. Individuals can contribute instant liquidity, which greatly increases their investing potential. Repayment options are flexible, and there are no penalties for foreclosing. Apply for a LAS at any time using our simple online application process.

Benefits over unsecured loan
 

Benefits over unsecured loan

  • These loans are quick and simple to obtain, with minimal paperwork required due to the fact that this is a secured loan. The loan value is always lower than the investment's cash value; if the cash value approaches the outstanding loan value, the lender may request further security or liquidate the collateral and close the loan.
  • The loan value might range from 50 percent to 90 percent of the underlying asset (50 percent for equity shares and 90 percent for bank deposits, insurance policy surrender value)
  • When compared to unsecured loans and credit cards, this has the lowest interest rate. Unlike unsecured loans, there are no EMIs to worry about; only interest must be paid. Only the amount of the approved loan that has been used is used to calculate interest (pay as per use). There are no prepayment penalties or foreclosure fees.
Loan against shares

Loan against shares

This loan can be used as an overdraft or a demand loan against the eligible securities list. This keeps you involved in the stock market while also allowing you to obtain a loan in the event of a financial emergency. The amount of your loan varies depending on market conditions. In the event that the share's value falls, the lender may ask you to increase the security's worth by pledging more shares or replacing them with cash money. Typically, you can raise up to 50% of the value of the shares pledged.

Loan against Mutual Funds

Loan against Mutual Funds

Loans Against Mutual Funds in the Digital Age (LAMF). You can put up an overdraft limit in your account by pledging mutual fund investments online. Benefits include instant fund access, the option to keep mutual fund returns without having to liquidate them, and more. With our Insta Loan Against Mutual Funds feature, you can now get paperless and fast liquidity against your mutual funds. In a few simple clicks, a lien can be placed on mutual funds managed by asset management businesses registered with Computer Age Management Solutions Private Limited ("CAMS").

Loans against insurance

Loans against insurance

Loans against insurance are available from banks and insurance firms. However, it is not permitted in the case of Unit Linked Insurance Plans (Ulips) or term insurance contracts. The loan amount is between 60% and 90% of the insurance policy's surrender value. Only if you purchased your policy at least three years before to the loan application can you apply for a loan against it.

Read more about: loan mutual funds shares
Story first published: Tuesday, October 5, 2021, 18:42 [IST]
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