A loan against securities (LAS) is a unique lending facility. A bank or non-banking finance company (NBFC) can let you borrow against your assets.
If you have invested some money in mutual funds, shares, bonds, IPOs, FMPs, ESPOs and other assets, you can use them to avail some money against them.
When a financial emergency strikes, the first thing that people that they do is ask for credits from friends and family or avail a personal loan. If anyone has an investment and face any urgent needs of cash, they even think of liquidating the assets.
However, when they do that, although they get some money, they lose the interest-based ROI that there were to grab at the end of the tenor. Hence, the loan against securities works superbly to help you stay invested and keep earning the ROIs. At the same time, it lets you grab a high loan amount as per the lender’s terms.
However, some people still don’t know which lender to consider and apply for a loan against securities facility. If you are stuck, here is a quick post that will help you know more.
Things to look for in a lender while applying for LAS
- Is the lender offering a higher amount of loan?
The first thing before deciding on a lender to apply for a loan against securities is that you should see if it offers a high loan amount or not. Nowadays, leading NBFCs provide as high as up to Rs.10 crore to cover your multiple needs.
- What is the minimum value of the portfolio required by a lender?
You should be aware that the value of your investments needs to be up to a limit to be eligible to apply for LAS. Many lenders have fixed the worth of the securities as Rs.10 lakh. As a result, your securities value needs to be at least Rs.10 lakh to apply for a loan with a bank.
- What about the appointing of the Relationship Manager?
Many prominent online lenders appoint a dedicated Relationship Manager for all LAS customers. This way, they can contact a Relationship Manager 24/7 to know about all concerns about the loan against securities account.
- Are foreclosure and part prepayment chargeable?
Here is another thing worth knowing from a lender. Yes, you should know about charges for making a part prepayment or foreclosing the loan account. It is because most of the prominent names in the lending business have no provision to charge extra for offering these services.
- Can you access your LAS account online?
One of the key benefits of applying for the loan against securities accounts these days is that you can apply for it online. Not only you can apply for a loan against securities online but even access all loan related information. All known lenders provide their LAS customers with the online account access of their loans. Yes, you get to track the progress of your loan account from anywhere and 24/7. To do that, lenders provide you with login access to their digital customer portal. Hence, you should check out this facility if it’s being made available by your lender or not.
- Eligibility and documents
The documents and eligibility criteria for the loan against securities account is quite simple. Most of the standard eligibility parameters include:
- The applicant being 21 years old and a resident of India
- He/she has a consistent income source
- ID and address proofs
- Salary Slips
- Documented proofs of the invested securities
- Recent coloured and passport size photograph
Some of the benefits of the loan against securities account are now listed which you should see if your lender is offering you or not.
If you are ready to apply for a loan against securities, you can contact a leading online lender and get started.