Loan Against Securities
With a loan against securities, you can get the flexibility of liquidity and access to cash when you need it, without selling off the same. Securities can be in the form of mutual funds, shares, life insurance policy, etc.
This loan product is an overdraft facility that can be secured against your investment portfolio.
• Resident Indians and NRIs above the age of 18 are eligible for a Loan against Mutual Funds
• HUFs, Sole Proprietorships, Partnership firms, Private Limited companies etc. are eligible for a loan against debt mutual funds.
• Resident Indians are also eligible for a Loan against a Life Insurance Policy
Features of Loan Against Securities
Broadly speaking, following are some of the features of a loan availed against securities:
• Get high-value loans up to 85% of security value
• Attractive interest rates
• Pay interest only on the amount utilized—no EMI or postdated cheques required
• There are generally no prepayment charges if you wish to prepay the loan
• Short-term loan with a tenure of up to one year, which can be renewed
• No additional security or collateral is required, apart from the securities against which the loan is granted.
Loans Against Securities is generally offered at attractive interest rates. The interest rate is based on the prevailing market rate at the time of the loan. You pay interest only when you use the money and for the number of days, the money is used. Keep in mind that the interest rates vary according to the product variant.
Documentation required is generally minimal. Apart from the standard KYC documents, you will be required to submit documents pertaining to the security you are about to avail a loan against property.
Following is a list of the documents required along with the completed application form. Do keep in mind that the requirement may slightly vary from lender to lender.
• Proof of identity: Voter ID card / Driving license / PAN card / Employee ID card / Government department ID card (any one)
• Proof of Income: Latest salary slip showing all deductions / Form 16 with recent salary certificate / Income Tax returns of last 2 years (any one)
• Proof of residence: Bank account statement / Latest electricity bill / Latest mobile/ telephone bill / Latest LIC policy/ insurance premium receipt / Existing house lease agreement /
• Bank Statement/Pass Book of last 6 months
• Latest statement of holding for mutual funds
• Pledge form for the creation of pledge