Loans Against Shares (LAS) are secured loans offered by banks and NBFCs when you pledge some securities with them. LAS is a beneficial option for meeting all your financial needs. Also, these shares are used as collateral by the lender which means it is quite a safe option. Like other personal loans, you can utilize this loan amount for anything you want. Many customers use this amount to reinvest in shares, which is not advisable. Hence, when you need some urgent funds, you can pledge your purchased shares to the lender and get an assured sum.
A significant advantage of loan against shares is you have to pay the interest on the amount you have withdrawn. Also, the interest rate varies according to the time span for which you have utilized the loan.
Why Should You Purchase Loan Against Shares (LAS)?
One primary advantage of loan against shares is that you can opt for this option if you are expecting inflow of funds in the future, but are currently in a cash crisis. You can meet your financial needs immediately and can pay back the loan within a short duration. Some lenders also offer the facility of opening an overdraft account. This account will be opened in your name, and you would also have an ATM with a checkbook.
● The overdraft facility offered by banks for LAS is usually cheaper by up to 200 basis points. Its tenor varies from lender to lender. However, often it is for one year. Some lenders have also a set minimum and maximum amount for an overdraft.
● This limit is usually set against the total value of the shares you have pledged. This limit differs in case of both Equity and Debt Securities.
● LAS and overdraft facilities, have the same features. However, unlike overdraft, lenders might ask the purpose for which you are availing LAS. Like overdraft, there is a specific list of securities by banks which contains only those shares which can be pledged. A nominal processing fee is charged for availing LAS.
● Both the above-mentioned facilities don’t have any foreclosure charges. The documentation is also a hassle-free process. You need to produce your demat statement along with a form which mentions how many shares have been pledged. Apart from that all your address and identity proofs, income and monthly statements also have to be submitted.
● One major advantage of LAS is that you don’t have to pledge all the shares you own, to the lending institution. You can keep some amount in your savings account which you have gained by pledging them. You can invest a higher portion in Mutual Funds, and pledge the remaining ones.
● The tenor for most loans can be decided by you at the time of applying for it. While applying for for loan against shares, it is typically up to one year and is renewable after it.
Bajaj Finserv offers LAS up to 10 Crore for anyone who has reached 21 years and has a regular source of income. You can get an attractive interest rate on your loan amount, which enables you to ensure higher profits.
A significant advantage of loan against shares is you have to pay the interest on the amount you have withdrawn. Also, the interest rate varies according to the time span for which you have utilized the loan.
Why Should You Purchase Loan Against Shares (LAS)?
One primary advantage of loan against shares is that you can opt for this option if you are expecting inflow of funds in the future, but are currently in a cash crisis. You can meet your financial needs immediately and can pay back the loan within a short duration. Some lenders also offer the facility of opening an overdraft account. This account will be opened in your name, and you would also have an ATM with a checkbook.
● The overdraft facility offered by banks for LAS is usually cheaper by up to 200 basis points. Its tenor varies from lender to lender. However, often it is for one year. Some lenders have also a set minimum and maximum amount for an overdraft.
● This limit is usually set against the total value of the shares you have pledged. This limit differs in case of both Equity and Debt Securities.
● LAS and overdraft facilities, have the same features. However, unlike overdraft, lenders might ask the purpose for which you are availing LAS. Like overdraft, there is a specific list of securities by banks which contains only those shares which can be pledged. A nominal processing fee is charged for availing LAS.
● Both the above-mentioned facilities don’t have any foreclosure charges. The documentation is also a hassle-free process. You need to produce your demat statement along with a form which mentions how many shares have been pledged. Apart from that all your address and identity proofs, income and monthly statements also have to be submitted.
● One major advantage of LAS is that you don’t have to pledge all the shares you own, to the lending institution. You can keep some amount in your savings account which you have gained by pledging them. You can invest a higher portion in Mutual Funds, and pledge the remaining ones.
● The tenor for most loans can be decided by you at the time of applying for it. While applying for for loan against shares, it is typically up to one year and is renewable after it.
Bajaj Finserv offers LAS up to 10 Crore for anyone who has reached 21 years and has a regular source of income. You can get an attractive interest rate on your loan amount, which enables you to ensure higher profits.
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