FAQ on Loan Against Securities
What is Loan Against Securities?
LAS(Loan Against Securities)refers to availing of loan by pledging/assigning the liquid securities(Shares,Bonds,Life Insurance Policies etc.)held by an individual/firm.This facility gives the customer immediate liquidity without having to sell the securities.
Apart from shares,which are other investments against which Loan Against Securities can be availed?
Currently this facility is being provided only against equity shares.Any further addition to the acceptable securities would be communicated in the due course.
Advantages of Loan Against Securities.- Leveraging available Investments for further Investments/meeting expenses.
- Interest charged only on the amount utilized.
- Benefits like bonuses and dividends continue to accrue to the shareholder.
- If there is an appreciation in the value of the securities placed as margin,the client would be eligible for an enhancement in drawing power.
- Provides instant liquidity without having to sell your securities.
Features of Loan Against Securities facility.
Interest chargeable only on the Loan amount disbursed and is charged on daily basis.
Instant liquidity.
Who can avail Loan Against Shares?- Loan Against Shares facility is available for Individuals(Salaried&Self Employed),Partnership Firm&Private Limited Companies.This facility is not available for NRI’s and Minors.
What are the Lending Rates?- Loans Against Securities comes to you at attractive interest rates,which are based on the trends prevailing in the market at the time of availing the loan.
What is the criteria for availing Loan Against Shares?- The equity shares offered as security should be fully paid.Preference shares and locked in shares are not acceptable as security.
- The shares offered as security must be in demat form.
- The shares should be on the approved list as applicable from time to time
- Customer has to hold/open a current account in the approved bank
What security/collateral does a borrower need to provide?- No additional security/collateral need to be provided,apart from the securities against which the loan is granted.
How much margin has to be maintained?
Minimum 40%of Market Value varying on Security Pledged.
What is the tenure of the loan?- Validity of each disbursement-12 months(Renewable as per the applicable terms and conditions).
For what all purposes can Loan Against Shares be availed?
Long Term Investment in Capital Market
Purchase/Renovation of House
Purchase of Vehicle
Travel/Holiday
Wedding/Education
Any other acceptable requirement
Request for closure/prepayment of Loan Against Securities facility.- Customer can close any tranche in part or in full.Interest would be charged pro rata for the outstanding amount
- There are no charges for closure of the tranche availed
- After the loan has been repaid,the pledgor will submit an instruction to its DP to initiate the closure of pledge by indicating the option close the pledge in the pledge form.
- There are no charges on prepayment of loan.
Can the customer avail loan if the criteria for availing the loan is not fulfilled?- Yes,a customer can still avail of a loan based on your profile,credit strengths,etc.Please feel free to contact us and we can advise looking at the merits of your case.
How can a borrower avail the Loan Against Shares?
SMS‘LAS”to 55454 and we will get in touch with you
E-mail us at customercare@reliancecommercialfinance.com with your details
Call us at 1800 200 3838 or 022-3989 3838 between 9:30 am-5:30 pm from Monday to Saturday(Except Public Holidays)