Loan against security is a loan advance to a customer against a pledge of security. It can be loan against insurance policy, mutual funds, National Savings Certificate and other securities. Loan against security can be given against the following securities:
Insurance policies
Non-convertible debentures
NABARD Bonds
UTI Bonds
Mutual fund units
Demat shares
National Savings Certificate or KVP, these are accepted in demat form only.
Loan against property helps you to avail timely finance instead of selling off the securities in a haste. The limit of the financial assistance depends on the security that you have pledged. Usually a current account is opened in the borrower’s name and the rate of interest is calculated on the amount that is withdrawn by you during the period of utilisation.
When you pledge a security, you get steady cash easily at the time you need it the most and this also means that you won’t have to sell your shares and not benefit from the bonus and dividends.
| Bank Name | Interest Rate | Loan Amount | Tenure |
|---|---|---|---|
| HDFC | At the discretion of the bank | Rs.50,000 onwards | Depends on the loan amount |
| Bajaj Finserv | 9.50% to 12.00% p.a. | Up to Rs.10 crore | Depends on the loan amount and rate of interest |
| ICICI Bank | On the basis of the tenure and the amount withdrawn | Rs.50,000 to Rs.20 lakh | Depends on the loan amount and rate of interest |
| Tata Capital | 10.50% onwards | Rs.50,000 to Rs.20 lakh | 1 year with an auto renewable feature |
| State Bank of India (SBI) | On the basis of the selected scheme | Rs.20,000 to Rs.5 crore (Based on the selected scheme) | Depends on the loan amount and rate of interest |
| Axis Bank | 10.50% to 12.75% p.a. | Up to 85% of the value of securities | 1 year with an auto renewable feature |
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