Understanding the benefits of Loan against Securities

Posted by deepak on August 7th, 2019

Wanting an easy and efficient way to acquire loans without battling with the cumbersome paperwork? There is one efficient way to do so through acquiring loans through a loan against securities in case of an emergency where you need an amount; you can sell your mutual funds and acquire the requisite money. The other way is by surrendering your property to the financial institutes till you fully repay all the loans. This method of acquiring loans are known as Loan Against Securities or (LAS).

Loan against securities entails a borrower pledging the refunding of a loan against insurance policies, loan against shares, or loan against mutual fund that the borrower has submitted to the financial institution. There exist some securities that can be pledged to the banks that are non-convertible debentures, UTI bonds, Demat shares, NSC/KVP in Demat form. An added disclaimer, you cannot get a loan against all or any shares. There is a panel of defined shares that a bank lists, only those shares will be accepted.

Loan against securities acts as a great boon as you are made available easy cash when you are in an emergency. You can parallelly enjoy the rights of receiving dividends, and bonuses, including the benefits from the price activities that take place in the shares for which the loan is availed in the first place. Overall, it is a great option to meet your short-term financial requirements. Also, the interest you need to pay up LAS is quite reasonable.

The loan amount that can be procured with the redeeming of these securities varies between 60 to 70% of the actual value of the securities. E.g., if your stock portfolio is worth Rs 10 lakh, then you can avail a loan in the range of Rs 5 to 7 lakhs. This too depends on the liquidity of the stocks. The great advantage of obtaining a loan against securities is that you will be charged interest only on the amount that you tend to withdraw from the account. The other benefit of utilizing this scheme is that there is no requirement of a personal guarantor for a loan against shares.

JMFL helps you acquire LAS in the most profitable manner possible. The professional experts of JMFL have mastered the art of engaging loan procedures through systematic guidance to their borrowers. This ensures that the arrangement of loan against mutual funds or for that matter securities is taken care of efficiently. Do visit the website of JMFL for further details in procuring loan against securities.