Loans against share helps you take advantage of your investments and use it for further financing. Additionally, it fulfils people’s contingencies and helps them liquidate investments without selling them. Some things to consider before taking the loan against shares are:

Things to Consider Before Opting for Loan Against Shares:

• Take a loan against shares and debentures (equity) only if you are expecting full compensation through benefits and need the loan to fulfil the need for funds in the interim period. 

• In case of reinvestment of this loan, ensure that the advantages are equal to/more than the costs you incurred. 

For your better understanding, the steps of the procedure are as follows:

• One can pledge shares, units, bonds, and even policies to avail a loan against policy. 

• After you have submitted the application, including all the share certificates and relevant documents, the lender will open an account in your name. 

• The loan is sanctioned, and the borrower is informed of the interest rate which is only charged on the number of days you have utilised the funds. 

• The loan amount is based on 2 factors, the first is the extent of financing in a specific stock. The second factor is the value of the stock upon evaluation. 

The loan for one borrower does not usually exceed Rs.20 lakhs, as per the RBI’s rules for loans against security of shares and maximum 10 lakhs for equity bonds. 

Fullerton India specialises in loans against shares. We offer flexible repayment tenures and competitive interest rates so that you can ensure your financial health!

Additional Read: What is loan against demat shares? Point’s to Check Before Applying