6 MinsApril 8, 2022
Raghav Bhatia, the owner of a mid-sized garment exporting firm, wanted Rs 45 lakh for new equipment for his factory. He was hoping to get payments from his clients, but unfortunately, those got delayed. Now, if he doesn’t pay on time, he would have to pay a higher rate than the one he had entered earlier. To avoid this, it is imperative to arrange funds immediately. He was thinking of raising money by selling some of his equity investments. But then he learnt that he could raise a loan at a competitive interest rate, against the securities, without selling them instantly.
This is a win-win situation for him. His equity investments would continue to earn returns, but he would also get the funds he needed, and he can repay at his convenience. What’s more? The process is paperless and can be completed in three simple steps. Here are the features and benefits of Instant Loan Against Securities, a secured loan, which can often be a boon in case of an emergency.
What is 24x7 Loan Against Securities?
24x7 Loan Instant Loan Against Securities is a secured loan that you can avail against your financial investments such as equity shares, mutual funds and bonds. The securities are pledged as a security with the bank. The loan amount is calculated as a certain percentage of the current market value of the security.
Monetise securities without liquidating them
Most portfolios are built keeping certain specific financial goals in mind. To liquidate them in a crisis means forgoing the potential capital appreciation and returns like interest or dividends. With 24x7 Loan Against Securities, you don’t have to liquidate your investments. Instead, you can offer them as collateral and get funds to tide over the situation. Your investments will continue to earn returns even as you borrow against them.
Pay interest only on the amount utilised
Unlike a personal loan, where you pay interest on the total amount, 24x7 Loan Against Securities is like an overdraft facility. This means you pay interest only on the amount utilised. Suppose the loan sanctioned to you is Rs. 10 lakhs, but you have only utilized Rs. 4 lakhs, then you must pay interest only on Rs 4 lakhs. This ensures a financial cushion without paying any interest.
If your needs are short term, like in the case of Raghav, 24x7 Loan Against Securities is an apt way to raise funds. Once his clients’ payments came in, Raghav could pay off the loan and redeem the securities.
Also Read: Secured or Unsecured loan - which one should you go for?]]
Get a loan against a range of securities
The loan is available against a wide range of securities, including listed equity shares, units of mutual funds, and list bonds.
Easy to apply
24x7 Loan Against Securities is easy to apply and all it requires is three simple steps. You can apply for it either through internet banking or through Axis Mobile or just by clicking here.
Competitive Interest Rates
Since 24x7 Loan Against Securities is a secured loan and is processed online, the interest rates are extremely competitive. Axis Bank charges interest rates starting at 9.50% for digitally processed case and for cases processed physically, it charges interest rates starting at 10.5%.
Conditions to keep in mind:
- The loan amount is calculated as a certain percentage of the security’s market value. If the value changes due to market fluctuations, you may have to pre-pay part of the loan to maintain the loan-to-value ratio.
- Check if the bank charges any pre-payment charges. For instance, Axis Bank doesn’t impose any charges if a 24x7Loan Against Securities is pre-paid.
Click here to know more about Axis Bank’s Instant Loan against Securities.
Disclaimer: The Source, a content creation and curation firm, has authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision. Names mentioned in this article are fictitious in nature and only for explanatory purposes