Tips to Qualify For Availing Loan Against Security
15 Feb 2023
Table of Content
When funds are required, you tend to liquidate assets. Instead, go for a loan against your pledged securities as collateral to look after your immediate financial needs. You can take loans against shares, mutual funds, bonds, debentures and SGB that will fulfil your immediate cash obligations.
What Is Loan Against Securities?
Investors these days are expanding their investment portfolio by investing in shares and securities with traditional saving and investing options. These not only strengthen their net worth but also create avenues for quick short-term loans against shares. The advantage of a loan against security allows you to borrow the amount that you require on short notice.
Tips that qualify you for a loan against securities
Before you apply for a loan against these collaterals, it is smart to go through the tips we are sharing to ensure you qualify for the loan.
• State the purpose of the loan
Objectively state the purpose for which you require the loan so that the lender quickly understands and determines your intention for seeking the loan. This facility is available to meet contingencies needs only.
• Look for a high-value lender
The lending market is filled with many retailers offering attractive prices. While you look for high-value lenders, make sure you select the one that offers the best value in terms of price and security.
• Audit the shares and securities used as collateral
A list of pre-approved shares, securities and equity holdings are listed with banks. Check if your holding is eligible.
What is the loan against shares eligibility?
When applying for a loan against collaterals like shares and securities, ensure you fulfil the following criteria so that you can easily get your loan upon application.
- You should be an Indian citizen
- When applying for the loan your age should be over 21 and under 70 years.
- You must be a salaried employee in either public or private sector. In the case of self-employed individuals, regular income proof needs to be provided.
- Your CIBIL score should be a minimum of 701.
- The financial asset used as collateral should have a good rating
Documents required
- KYC, PAN Card, AADHAAR card
- Bank account proof
- Demat account proof
- Demat/Mutual Fund holding statement
- Income proof of both salaried and self-employed individuals
Credit underwriting formalities
Once the application is submitted, the lender will thoroughly review your application and the documents to evaluate creditworthiness. Your profile and collateral's financial security determining its rightful value are all audited against the current market performance.
Wrap Up!
The sanction rate on shares and securities is much higher. These loans are benefitted from the flexibility of multiple drawdowns and repayment all along the loan tenure. This is the reason why lenders readily agree to disburse loans against these trusted collaterals.
Also Read: What Is Loan Against Securities – A Complete Guide
Popular Articles
Guide to Getting Agriculture Loan: Application, Eligibility & Required Documents
Related Articles
Guide to Getting Agriculture Loan: Application, Eligibility & Required Documents
-
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
How To Get A Bike Loan?
Two-wheelers are necessary nowadays as they are convenient and practical on the road. But one might find it difficult to afford such a necessity out of budget constraints. However, that doesn't quite mean there is no way out. Two-wheeler loans are among the most reliable sources to avail of funds to afford such an efficient mode of transportation. Read on to understand the step-by-step two-wheeler loan process from the Bank of Baroda (BoB).
The Different Types of Loans Available in India
Loans are essentially capital borrowed from a bank or a financial institution. These institutions charge interest against lending money for a certain definite period. For some, bank loans are a way to meet emergencies while for others, loans act as a catalyst for growth. It all depends upon the purpose and the type of loans that the borrowers have availed. Various types of bank loans are available that a borrower can access. Here are the different types of loans that borrowers can avail of from lending institutions.
