Most people are not aware that apart from taking home loans, personal loans or loans against FD – they can avail Loans Against Shares (LAS) too. Availing LAS is as simple as any other loan. Such loans can be taken against any securities you own such as Mutual Funds, Bonds, ESOP, FMP, etc. LAS is now offered from all the private and public-sector lending institutions, banks and NBFCs. With Bajaj Finserv, you can expect to get easy loan against shares at attractive interest rates.
LAS is an excellent option to get quick financing when you need money to meet any financial or personal requirements. Like any other loan, you should analyze and assess purpose, affordability and their impact on other financial short and long-term goals when you apply for LAS. Applying for LAS has now become a comfortable and affordable option as it offers urgent liquid money. All you need are some shares with high liquidity and market value.
Why should you take Loan Against Shares (LAS)?
One big difference between loan against shares and other loans is that there are no charges for prepayment. NBFCs like Bajaj Finserv offers LAS with no loan statement charges with a minimal processing fee, while applying online.
● In most cases, you also get an overdraft facility when you open a current account. Also, the interest is charged only on the amount withdrawn according to the period for which you will utilize it.
● Unlike personal and home loans, LAS is not based on EMIs. However, one essential thing to keep in mind is you should not reinvest the loan taken against shares, back into the market.
● Growth in incomes of the Indian people is the main reason behind an exponential increase in the loan market in the recent years. That is the reason, the listed securities by banks are approved at regular intervals every six months. This is important to keep the limits of margin which can be sanctioned to the customers. Some loans are also included with riders or add-ons which can be invested for checking any speculation and other illegal activities regarding shares.
● There is often a maximum limit for providing LAS to the borrowers, which is usually set by banks. These limits are based on the shares pledged by the customers towards the lending institution. This consists of volatility, mid or small sized capital, and liquidity of stocks. In case of Debt Securities, you can withdraw a substantial amount. However, in other securities, the amount of loan depends on the tenor, risk tolerance and liquidity.
● On the other hand, if the market prices fall while you have taken a loan, you have to pledge additional securities to the lender quickly. Hence, it is always advisable to borrow loans that you can easily afford to repay. While there is an increase in the market prices, the banks can increase the limits and margins. These are subject to some conditions where you would have to pay the interest every month, and it cannot be delayed.
● In case of selling the shares which you have pledged, you can de-pledge them. This process of de-pledging takes around two days.
While purchasing loan against shares, it is crucial to keep a check on market trends. If it is bullish, you can redeem your investments. Whereas, if it is bearish you can go for buying loans. Many online platforms like Bajaj Finserv have online application facility to apply for loan against shares requiring minimum documentation from you. There is a Relationship Manager always at your service to deal with all your queries and complaints.
LAS is an excellent option to get quick financing when you need money to meet any financial or personal requirements. Like any other loan, you should analyze and assess purpose, affordability and their impact on other financial short and long-term goals when you apply for LAS. Applying for LAS has now become a comfortable and affordable option as it offers urgent liquid money. All you need are some shares with high liquidity and market value.
Why should you take Loan Against Shares (LAS)?
One big difference between loan against shares and other loans is that there are no charges for prepayment. NBFCs like Bajaj Finserv offers LAS with no loan statement charges with a minimal processing fee, while applying online.
● In most cases, you also get an overdraft facility when you open a current account. Also, the interest is charged only on the amount withdrawn according to the period for which you will utilize it.
● Unlike personal and home loans, LAS is not based on EMIs. However, one essential thing to keep in mind is you should not reinvest the loan taken against shares, back into the market.
● Growth in incomes of the Indian people is the main reason behind an exponential increase in the loan market in the recent years. That is the reason, the listed securities by banks are approved at regular intervals every six months. This is important to keep the limits of margin which can be sanctioned to the customers. Some loans are also included with riders or add-ons which can be invested for checking any speculation and other illegal activities regarding shares.
● There is often a maximum limit for providing LAS to the borrowers, which is usually set by banks. These limits are based on the shares pledged by the customers towards the lending institution. This consists of volatility, mid or small sized capital, and liquidity of stocks. In case of Debt Securities, you can withdraw a substantial amount. However, in other securities, the amount of loan depends on the tenor, risk tolerance and liquidity.
● On the other hand, if the market prices fall while you have taken a loan, you have to pledge additional securities to the lender quickly. Hence, it is always advisable to borrow loans that you can easily afford to repay. While there is an increase in the market prices, the banks can increase the limits and margins. These are subject to some conditions where you would have to pay the interest every month, and it cannot be delayed.
● In case of selling the shares which you have pledged, you can de-pledge them. This process of de-pledging takes around two days.
While purchasing loan against shares, it is crucial to keep a check on market trends. If it is bullish, you can redeem your investments. Whereas, if it is bearish you can go for buying loans. Many online platforms like Bajaj Finserv have online application facility to apply for loan against shares requiring minimum documentation from you. There is a Relationship Manager always at your service to deal with all your queries and complaints.
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