Loan Against Securities: An Ideal Overdraft for Easy and Smart Borrowing


The present financial landscape is about fluctuating interest rates and evolving debt scenarios. Business owners and individuals are strategically reassessing their approaches to overcome financial challenges like higher EMIs and prolonged loan tenures.

A rising alternative gaining prominence is Loan Against Securities (LAS), offering flexible and cost-effective solutions and a great means to navigate individual as well as business-related financial obligations adeptly.

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LAS – Redefining Financial Flexibility

The concept of Loan Against Securities (LAS) is gaining widespread acclaim as a more adaptable and cost-efficient alternative to conventional loans. Loan against shares is beneficial for investors with substantial securities portfolios needing immediate liquidity, A loan against securities is a suitable option for those averse to liquidating securities due to tax implications, market conditions, or sentimental reasons. Notably, a loan against securities has lower interest rates than those of other unsecured loans, presenting an enticing option for business owners, entrepreneurs, and individuals seeking to curtail borrowing costs.

Loan Against Securities is widely offered by most reputed and leading banks, NBFCs, etc. You can also avail a loan against shares through facilitators like Rurash Financials.

Five Key Considerations for Loan Against Shares

Strategic Share Portfolio Composition:

The composition of one’s equity share portfolio emerges as a pivotal factor in determining the loan amount. Lenders exhibit a keen interest in the specific share schemes invested in. While perspectives on shares may differ, certain lending institutions may endorse loans up to 50% of the net asset value for equity shares and 80% for debt shares.

Loan Amount Approval Limits:

Various banks and financial institutions establish differing limits on minimum and maximum loan amounts against equity and debt shares. Typically, minimum loan amounts are set at 20 lakh rupees for equity and one crore rupees for debt. It’s important to note that non-banking financial companies (NBFCs) might offer extended loan amount limits.

Interest Rates and Affordability in LAS:

In the domain of Loan Against Shares (LAS), interest rates prove significantly lower compared to traditional unsecured loans like credit cards or personal loans. This advantage arises from the secured nature of LAS, backed by the collateral of share units. A meticulous exploration of lending options is essential, as not all banks provide uniformly competitive rates for loans against shares.

With facilitators like Rurash Financials, you can get a Loan Against Shares ranging from Rs.10 lacs to Rs. 100 Crore. The benefit of applying through an aggregator is that they will not only get the best options but even source the funds from more than 1 lender to match your requirements in case of approved securities and appropriate documentation.

Continued Returns and Market Dynamics:

Pledging share units as collateral for a loan ensures the retention of ownership while enjoying continued returns. The units serve as security, with the bank reserving the right to sell them only in the event of default. This safeguards investments, keeping them market-linked and earning returns as long as repayment obligations are fulfilled.

Discerning Financial Institution Preferences:

Recognizing that not all banks share an equal inclination to offer loans against shares is crucial. Thorough research and comparison of lending institutions become imperative to secure the most favourable terms and conditions tailored to financial needs.

Explore the LAS Advantage with Rurash Financials

Rurash Financials emerges as a streamlined and cost-effective financial solution for those in pursuit of enhanced financial flexibility. With the option to foreclose loans at any time and a part-payment facility without additional fees, you can expect the best lender to be matched to meet your requirements.

Borrowers have access to swift and secure financing ranging from 10 lacs to 100 Crores by pledging equity shares, mutual fund investments, FMP, insurance, or bonds. Rurash Financials streamlines the financing process through a user-friendly application and ensures expeditious processing. The implementation of the Perfect Overdraft Facility guarantees that borrowers pay interest solely on the monthly outstanding loan amount. Each client is assigned a dedicated Relationship Manager from Rurash, providing a personalised service. In response to the escalating demands for Loan Against Securities (LAS), Rurash Financials establishes itself as the epitome of seamless flexibility in financial solutions.

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same. The article does not constitute financial advice.

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