Home Music Industry Loan against shares and mutual funds; Why use the loan against securities?

Loan against shares and mutual funds; Why use the loan against securities?

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Why use the loan against securities?

You retain ownership of your investment and continue to reap benefits from it, such as dividends and bonuses. A securities loan allows you to receive a large loan amount, up to 80% of the collateral deposited. Easy renewal and quick eligibility without the need for an additional document or proof of income. Individuals can provide instant cash, which greatly increases their investment potential. The repayment options are flexible and there are no penalties for foreclosure. Apply for a LAS anytime using our straightforward online application process.

Advantages over unsecured loan

Advantages over unsecured loan

  • These loans are quick and easy to obtain with minimal paperwork required due to the fact that it is a secured loan. The value of the loan is always less than the cash value of the investment; If the cash value approaches the value of the current loan, the lender can ask for additional collateral or liquidate the collateral and close the loan.
  • The loan value can range from 50% to 90% of the underlying asset (50% for stocks and 90% for bank deposits, the cash value of the insurance policy)
  • As compared to unsecured loans and credit cards, this one has the lowest interest rate. Unlike unsecured loans, there is no EMI to worry about; only interest needs to be paid. Only the approved loan amount that has been used is used to calculate interest (pay according to use). There are no prepayment penalties or foreclosure fees.
Loan against shares

Loan against shares

This loan can be used as an overdraft or a demand loan on the list of eligible securities. This allows you to stay involved in the stock market while still allowing you to secure a loan in the event of a financial emergency. The amount of your loan varies depending on market conditions. In the event that the value of the stock drops, the lender may ask you to increase the value of the security by pledging more shares or replacing them with cash. Typically, you can increase the value of the pledged shares up to 50%.

Loan against mutual funds

Loan against mutual funds

Loans Against Mutual Funds in the Digital Age (LAMF). You can set an overdraft limit in your account by pledging mutual fund investments online. Benefits include instant access to funds, the ability to hold mutual fund returns without having to liquidate them, and more. With our Insta Loan Against Mutual Funds feature, you can now get paperless and fast cash against your mutual funds. With just a few clicks, a lien can be placed on mutual funds managed by asset management companies registered with Computer Age Management Solutions Private Limited (“CAMS”).

Loans Against Insurance

Loans Against Insurance

Loans for insurance are available from banks and insurance companies. However, it is not allowed in the case of insurance plans linked to unit-linked units (Ulips) or term insurance contracts. The loan amount is between 60% and 90% of the cash value of the insurance contract. Only if you purchased your policy at least three years before applying for the loan can you apply for a loan against it.

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