Getting a loan is now simpler and more acceptable than ever, whether it's to cover financial crises or achieve specific short- or long-term goals. However, because there is such a strong demand for loans, they come with exorbitant interest rates, which prevent many individuals from accessing and paying them.

A loan against shares is a practical alternative that can help you obtain a loan and maximize your share market assets if you need to borrow money but do not want to put your actual belongings in jeopardy. This concept of Loan Against Shares is a very viable option if you have a bad credit score or want more security on your loan.

Let’s move ahead and gather every relatable information of Loan Against Shares.

Key Highlights of Loan Against Shares

• The loan value is a percentage of the market value of shares held in Demat form.

• Securities eligible for a loan against shares are – equity shares, preferential shares, ESOPs (Employee stock options), and any other form of equity.

• Generally, the loan value is 50-60% of the equity amount, but it can go up to 80%

• Repayment flexibility is available on these loans.

• 9-18% is India's usual loan against shares interest rate.

• You can pre-close a loan without any prepayment charge.

• In the event of default, the underlying shares will be sold off to settle the loan.

How do Loan Against Shares Work?

All banks and financial institutions update a list of the stocks and bonds they accept as collateral for loans. Most banks consider shares and corporate bonds from 50 to 100 of the leading firms on the market as acceptable options for lending collateral.

When you apply for a loan, you commit a number of shares from your portfolio to the financial company in exchange for the company giving you money for a set number of months at an interest rate.

Despite being committed to a bank, the securities are still your property, so you continue to profit from their gains. When you pay the bank a sum you and the bank have agreed upon, the pledge is canceled. Like other loans, the borrower also pays interest to the bank.

Advantages of Loan Against Shares

Let’s know the advantages of a Loan Against Shares before you get one:

• Low-interest rate compared to a personal loan.

• Simple and speedy loan processing.

• The market value of share is easily determined.

• Both banks and NBFCs provide loans against shares.

• Affordable repayment terms

• Available lending types include demand loans and overdraft facilities.

• When using an overdraft facility, the borrower is only required to pay interest on the money they have withdrawn, and for the time they have done so.

• The applicant's credit score is not a factor in determining loan eligibility.

Eligibility for Loan Against Shares?

Here are the eligibility criteria for applying for a loan against shares:

• Must be a citizen of India, NRI, or any business organization

• Applicant should be between the ages of 18-65 years of age

• Must have proof of stable income

• The entity must have a Demat account with any depository participant

Documents Required for Loan Against Shares?

Similar to all other loans, several documents are required to apply for a loan against Demat shares successfully:

• Income proof

• Details of Demat securities

• Identity proof

• Address proof

• Credit score

How to apply for a Loan Against Shares?

You just need to follow 4 simple steps to get your loan:

Step 1: Visit the official website of Upniva.com

Step 2: Enter your full name and phone and generate OTP to start the lending process.

Step 3: Please fill out the form and submit the necessary documents to complete the KYC..

Step 4: Sit & wait, as your loan will be disbursed into your account within a few hours.

Moreover, for hassle-free loan approval, you can always count on us as we are here to assist you in getting your loan approved within seconds.