{"id":6712,"date":"2022-04-08T12:20:42","date_gmt":"2022-04-08T06:50:42","guid":{"rendered":"http:\/\/blog.ruloans.com\/?p=6712"},"modified":"2022-04-08T12:20:42","modified_gmt":"2022-04-08T06:50:42","slug":"loan-against-securities-loan-against-shares-and-mutual-funds","status":"publish","type":"post","link":"https:\/\/www.ruloans.com\/blog\/loan-against-securities-loan-against-shares-and-mutual-funds\/","title":{"rendered":"Loan Against Securities &#8211; Loan Against Shares And Mutual Funds"},"content":{"rendered":"\n<p>A loan against securities\nallows every investor to raise funds by leveraging the existing funds. During\nthe period of loan tenure, the borrower consistently receives the credit of\nbonuses, interest as well as securities.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.ruloans.com\/blog\/loan-against-securities-loan-against-shares-and-mutual-funds\/#What_Is_a_Loan_Against_Security\" >What Is a Loan Against Security?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.ruloans.com\/blog\/loan-against-securities-loan-against-shares-and-mutual-funds\/#How_Does_Loan_Against_Securities_Work\" >How Does Loan Against Securities Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.ruloans.com\/blog\/loan-against-securities-loan-against-shares-and-mutual-funds\/#What_Are_Some_of_the_Features_of_Loans_Against_Securities\" >What Are Some of the Features of Loans Against Securities?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.ruloans.com\/blog\/loan-against-securities-loan-against-shares-and-mutual-funds\/#How_To_Determine_Good_Security\" >How To Determine Good Security?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.ruloans.com\/blog\/loan-against-securities-loan-against-shares-and-mutual-funds\/#What_Are_The_Eligibility_Criteria_to_Apply_for_a_Loan_Against_Securities\" >What Are The Eligibility Criteria to Apply for a Loan Against Securities?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.ruloans.com\/blog\/loan-against-securities-loan-against-shares-and-mutual-funds\/#What_Are_the_Necessary_Documents_Required_for_a_Loan_Against_Securities\" >What Are the Necessary Documents Required for a Loan Against Securities?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_a_Loan_Against_Security\"><\/span><strong>What Is a Loan Against Security?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A loan against security is regarded as a loan advance given to a particular customer against the pledge of his\/her security. The loan could be against a National Savings Certificate, Insurance Policy, Mutual Funds or Any Other Type of Security.<\/p>\n\n\n\n<p><strong>A list of different types of securities against bank loans:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Demat Shares<\/li>\n\n\n\n<li>Insurance Policies<\/li>\n\n\n\n<li>Uti Bonds<\/li>\n\n\n\n<li>Non-Convertible Debentures<\/li>\n\n\n\n<li>Nabard Bonds<\/li>\n\n\n\n<li>Mutual Fund Units<\/li>\n\n\n\n<li>Gold Mutual Fund\/Gold Bonds\/Gold In A Demat Form.<\/li>\n<\/ul>\n\n\n\n<p>KVP or National Savings\nCertificate, are also widely accepted in the form of demat only.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Does_Loan_Against_Securities_Work\"><\/span><strong>How Does Loan Against Securities Work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A loan against security\nhelps individuals to avail finance within the required time in place of selling\noff any kind of securities in haste. Depending on the type of security, the\nlimit of your financial assistance is set against what has been pledged.<\/p>\n\n\n\n<p>Generally in the name of\nthe borrower, an overdraft account is opened. The calculation of the interest\nrate is done on the withdrawn amount during the ongoing period of utilization.<\/p>\n\n\n\n<p>When a pledge is taken\nagainst security, it becomes easy to get cash when you require it urgently and\nthis doesn&#8217;t mean that the borrower has to sell their shares and be unaware of\nthe advantage from dividends as well as bonuses.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_Some_of_the_Features_of_Loans_Against_Securities\"><\/span><strong>What Are Some of the Features of Loans Against Securities?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The features are as\nfollows:-<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A loan against security falls under the category of secured loan. Bonds, shares,<br>mutual funds, as well as debentures, are offered as collateral.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The amount of the loan is dependent on the offered security of the borrower.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The loan tenure against security is generally one year and the renewal process is<br>quite easy. The interest rate values are low comparatively. <\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The charge of processing fees is nominal.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It&#8217;s important on the part of the borrower to be within the age of 18-65 years for<br>applying for a loan against security.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_To_Determine_Good_Security\"><\/span><strong>How To Determine Good Security?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>To determine good security, take care of the following factors:-<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If the credit score of the borrower is not good enough, the borrower would get the<br>loan against the security.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Security must be easily transferred. <\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It must be simple to sell the security and hypothecated.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_The_Eligibility_Criteria_to_Apply_for_a_Loan_Against_Securities\"><\/span><strong>What Are The Eligibility Criteria to Apply for a Loan Against Securities?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Given below are a few of the important eligibility criteria which is required to be fulfiled for being eligible to apply for a loan against securities from a bank:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Must reside in India<\/li>\n\n\n\n<li>The age should be at least 21 years<\/li>\n\n\n\n<li>A borrower should either be a self-employed or salaried individual<\/li>\n\n\n\n<li>The mortgage security must gain approval from the bank.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_the_Necessary_Documents_Required_for_a_Loan_Against_Securities\"><\/span><strong>What Are the Necessary Documents Required for a Loan Against Securities?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The salaried individual\nmust submit the following documents:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Income proof<\/li>\n\n\n\n<li>PAN card<\/li>\n\n\n\n<li>Demat account statement<\/li>\n\n\n\n<li>Copy of given security (bond, share, etc.)<\/li>\n\n\n\n<li>Identity and address proof<\/li>\n\n\n\n<li>Photograph<\/li>\n\n\n\n<li>Last 6 months&#8217; bank statement<\/li>\n\n\n\n<li>Cancelled cheque<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h3>\n\n\n\n<p>The facility of loan is\nconsidered to be an outstanding alternative for every long term investor as\nthis loan allows you to monetize your investments to raise funds for personal\nor corporate purposes. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>About Ruloans<\/strong><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.ruloans.com\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Ruloans<\/strong><\/a> is India&#8217;s leading financial products distribution company that helps manage your financial needs be it <strong><a href=\"https:\/\/www.ruloans.com\/personal-loan\/apply-now.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Home Loans<\/a>, <a href=\"https:\/\/www.ruloans.com\/personal-loan\/apply-now.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Personal Loans<\/a>, <a href=\"https:\/\/www.ruloans.com\/loan-against-property\/apply-now.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Loans against Property<\/a>, <a href=\"https:\/\/www.ruloans.com\/business-loan\/apply-now.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Business Loans<\/a>, <a href=\"https:\/\/www.ruloans.com\/car-loan\/apply-now.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Auto Loans<\/a>, <a href=\"https:\/\/www.ruloans.com\/credit-card\/apply-now.htm\" target=\"_blank\" rel=\"noreferrer noopener\">Credit Cards<\/a>,<\/strong> Balance Transfers, and many more. Our vision is to be recognized for value creation, transparency, and the largest distribution capabilities in the financial industry. We also have an exclusive <strong><a href=\"https:\/\/www.ruloans.com\/become-partner\" target=\"_blank\" rel=\"noreferrer noopener\">DSA Partner Program<\/a><\/strong> for several professionals to leverage their skills and make the most benefits. Ruloans is present across 1200+ locations with over 7000 employees, consultants, and referral partners. Ruloans association with ~150 financial institutions including banks, NBFCs, and Fin-tech gives a wide choice for customers to choose from. We help you borrow right.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A loan against securities allows every investor to raise funds  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href=\"https:\/\/www.ruloans.com\/blog\/other\/\" rel=\"category tag\">Other<\/a>","rttpg_excerpt":"A loan against securities allows every investor to raise funds 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