Availing of loans nowadays can be a hectic process. The ongoing recession not only causes a cash crunch for banks but also restricts their ability to sanction loans. This led to raising questions about the fact that how a person then going to avail loans at the time of need.
That is why LAS comes into the picture. LAS is one of the most common types of loan in the financial sector. LAS refers to loans against security, a way of availing loans by pledging a certain amount of share. The shares work as the collateral for the banks.
What are approved security for LAS:
Instead of selling your investment at a low market rate, you can help yourself by pledging your security for the loans. A lot of thing comes under securities but banks allow only certain securities to be pledged for the loan. Usually, banks approve these securities:
- Mutual Fund
- Demat Shares
- Insurance
- Debenture
- NABARD and UTI Bonds.
These are the securities that can be used against taking loans and can act as collateral for you.
Benefits of taking LAS:
LAS brings several benefits for you but the biggest benefit is that even after pledging your shares to the bank you still have the right to enjoy its ownership, which means you will still be able to enjoy its rights and bonuses. Other benefits are:
- Interest rates are lower than usual personal loans.
- Quick and Convenient
- Quick access to funds
- Tax Benefit
- Flexible loan amount.
So, availing of LAS comes with a lot of benefits in comparison to a normal personal loan but it is advisable to consider your financial wealth in future planning to avail of those loans.
Features to Know:
Loan Against Share (LAS) is a secure loan as the securities are pledged as collateral. These loans are typically taken for a year and can be renewed if needed. So, these loans also hold other other features such as:
- Loan To Value Ratio: Loan-to-value ratio determines the maximum percentage of the amount that can be taken against any securities. It keeps on fluctuating based on the performance and market conditions.
- Processing Time: If you opt for LAS over any other loan, then the processing time is way much less than any other personal loan. The process of sanctioning loans is faster and smoother.
- Repayment Terms: In comparison to a normal personal loan, the repayment terms of LAS are different. You get flexible repayment options based on the lenders.
- Documentation: To obtain LAS, you need to provide different documents such as ownership proof, income, address, etc,
Eligibility Criteria:
The eligibility criteria vary depending on the lenders. At Divadhvik, The only eligibility criteria are that you should be employed and should be in the age group of 18-65 years. We offer loans to both salaried-class and self-employed class individuals.
Documents required to take LAS:
- Adhaar Details.
- PAN card
- Ownership certificate
- Bank Statement
- Income Proof
- Passport-size photo.
Conclusion:
In an era marked by stringent lending norms, securing a loan has become a formidable challenge for many. However, the landscape of financial solutions is evolving rapidly. Loans against shares emerge as a compelling alternative, offering a quick and convenient way to access funds without compromising your investments.
By leveraging the value of your shareholdings, you can unlock financial flexibility to meet your urgent needs.
If you are stuck in this process, you know where to go. Divadhvik is the most trusted growing financial institution that has everything for you. From personalized guidance to providing you with investing ideas according to your needs, we are here to help you in the best possible way.
