Acquiring funds while maintaining ownership of valuable assets such as gold, stocks, or bonds has become simpler! Loan against security is a popular option for personal financial needs, offering lower interest rates and quick loan approvals due to the presence of collateral. It’s a cost-effective way to meet your financial requirements without having to sell your assets.
Reasons why a Loan against Security is the Best Option for your Personal Need
Many people frequently turn to loans when they are in financial trouble. One such option is a loan against securities (LAS), which allows you to borrow money by assuring your securities as collateral. Here are the top reasons why a loan against securities is the best option for your personal needs:
Lower interest rates compared to unsecured loans :
LAS generally come with lower interest rates. This is due to the fact that the lender has your securities as security, which lowers the chance of default. Additionally, the interest rates on LAS are usually fixed, which means that you can plan your repayment schedule accordingly.
Digital loan against securities :
This process has made it much easier to apply for a loan. You can now apply for a loan against securities online, which saves time and effort. There is no need for you to visit the lender’s office, and the process is more efficient as a result of shorter lines and less paperwork. With this security, you can complete the application process from the comfort of your home or office.
Diverse Usage :
Loan against securities provides borrowers with flexibility in using the funds for various personal needs, such as home renovations, education expenses, medical emergencies, or debt consolidation. Borrowers have the freedom to utilize the funds as per their requirements, making it a versatile option for fulfilling diverse financial needs.
No need to liquidate securities :
When you pledge your securities as collateral for a loan against securities, you do not have to sell them. This means that you can get the cash you need while still enjoying the benefits of your assets, such as dividends and capital gains. The trouble of selling and repurchasing the securities, which may incur additional fees, can also be avoided.
An instant loan against securities :
Some lenders offer an instant loan against securities option, which means that you can get the loan amount disbursed to your account within a few hours. This option is ideal if you need the money urgently and cannot wait for the usual processing times. Before choosing this option, check the terms and conditions carefully as instant loans may have higher interest rates and processing fees.
Loan against mutual funds interest rate :
A loan against securities can be availed by pledging a variety of securities such as stocks, mutual funds, bonds, and fixed deposits. If you have invested in mutual funds, you can also pledge them as collateral for a loan against securities. Loans secured by mutual funds typically have lower interest rates than unsecured loans, making them a more affordable choice for borrowing money.
Flexible repayment options :
Loan against securities comes with flexible repayment options, which can be customized to your specific needs. You can choose the repayment schedule, the loan tenure, and the amount of each instalment. This means that you can plan your finances better and avoid any financial stress. It’s vital to remember that if a loan secured by securities is in default, the lender may decide to sell the securities to recoup the loan balance.
Good option for people with low credit scores :
Debtors who have lower credit scores may have better chances of obtaining a loan against security since the collateral serves as a security for the moneylender in the event of default, mitigating their risk and improving the approval prospects for the borrower.
Option to choose between fixed and floating interest rates :
Borrowers have the flexibility to select between fixed and floating interest rates while availing a loan against security. Fixed rates remain stable over the entire loan term, while floating rates are dependent on market conditions and are subject to change.
In conclusion, a loan against securities is a great option for your personal financial needs. It comes with lower interest rates, digital loan processing, quick disbursal, instant loan options, lower interest rates on loans against mutual funds, no need to liquidate securities, and flexible repayment options. Before applying for a LAS, make sure to research the different lenders and compare their terms and conditions to get the best deal.