A loan against shares (LAS) is a facility that most of the Indian investors are unaware of. It is because a less fraction of population invests in shares in India. And most of the investors having shares care more about their ROIs than anything else.
As a result, not all know that they can also use their investments to cover their many diverse needs.
The benefits of shares being discussed here are nothing but of the loan against shares.
If you have hit a rough financial phase in life, and need some urgent money, you can use your invested shares as collateral to acquire a high-value loan.
Yes, most of the leading banks and online non-banking finance companies (NBFCs) let you apply for a loan against shares.
However, before you get started for the LAS facility, you should consider some factors. This way, you would be able to make the most of the loan against shares facility. Let’s know more:
Consider these factors before you apply for a loan against shares
1) Is your lender offering you a higher loan amount?
This is the first thing that you should consider before applying for the Loan against shares. It is because if your prospective lender is unable to provide you with a loan amount that you wanted, it won’t serve your purpose. Most of the leading online NBFCs and select top banks may let you seize as high as up to Rs.10 crore. The availability of such a higher amount is a guarantee that you will face no issues in fulfilling your personal and professional needs.
2) Are you getting the assistance of a Relationship Manager?
Known names in the lending industry provide the services of dedicated Relationship Managers. As a result, you can easily connect with a Relationship Manager to assist in all loan related queries and withdrawals.
3) What about the eligibility and required documents?
Many shareholders don’t apply for LAS because of the complex eligibility terms and non-ending documentation. However, an online application of loan against shares has eased all. Here is a list of some standard eligibility documents for applying for the LAS:
✓You should be a residing Indian citizen and not an NRI
✓Your age should at least be 21 years
✓You should have a consistent source of income – self-employed or salaried
✓The minimum worth of your portfolio needs to be at least Rs.10 lakh
✓The maximum loan amount that you can get is up to Rs.10 crore
✓You need to submit your ID and address proof copies
✓Recent Salary Slips
✓Coloured pass size photograph
4) Will your lender give you online account access to the loan?
Everything is digitized and so are loans. Lenders provide loan customers with the facility of accessing all their loan information. It can be done via their digital customer portals. This way, you can track all LAS information right from anywhere and 24/7.
5) What about charges for part prepayment and foreclosure?
Before enrolling for the loan against shares, you should also ensure if there would be any charges for part prepayment or foreclosure.
Some of the key considerations that you should make before applying for the loan against shares account are now revealed. By now, you should be confident enough to apply for a loan against shares facility as per your needs.
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