Loan Against Share: We have to take loans many times. In such a situation, our first attention goes to personal loan. But many people do not know that if they invest money in the stock market, then they can also take loan against stock. If you also invest in the stock market, then this article is for you.
Loan Against Share: Whenever there is an emergency, loan plays a very important role for us. As soon as we think of loan, the first thing that comes to mind is personal loan. But, investors who invest in the stock market do not know about loan against stock. Yes, you can also take loan against shares. This is also a kind of financial tool through which you can meet your expenses. We will tell you about this below.
What is Loan Against Share (LAS)
In Loan Against Share (LAS), the investor is given a loan in a secured manner. Many banks and non-banking financial companies (NBFCs) of the country provide this facility. In this, the loan amount is limited to 50 percent of the market value of the shares. However, even after taking this loan, the investor retains ownership rights over his shares.
When the investor has taken a loan and is getting dividend at that time, the investor gets its benefit. In this loan, the lender only marks the shares in the demat account as pledge. Apart from this, if the investor wants, he can get the loan as a one-time amount or overdraft. This option gives flexibility to the borrower.
These documents are necessary
- PAN Card and Aadhaar Card for KYC documents
- Demat Account Statements
- Bank statements, salary slips, IT returns for age proof
What is the eligibility criteria
Loan against shares is available only to those investors who are shareholders of the companies listed by the lender. Many institutions also provide loan facility against other securities like mutual funds or bonds.
These are the terms and conditions
In this, the interest rate is much lower than that of a personal loan. The tenure of this type of loan is one to three years. In this, flexible repayment means the borrower can pay the interest along with the payment of the loan amount.
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