Digital Loan against Securities is one of the latest loan offerings that banks have been offering to its customers. These loans are similar to the Personal Loan, wherein which the funds borrowed is secured against the different types of securities.
Digital Loan against Securities can be applied through internet banking and gets instantly approved once the share values are confirmed. The borrower can customise his loan by deciding which Equity Shares or Mutual Funds to pledge and the desired amount. Once this is decided, the bank does its due diligence, and the loan is approved. Funds are instantly credited in a newly opened current account overdraft. Interest is charged based on the amount utilized.
But what are the securities that can be used for such type of loans? This handy guide helps out.
Here are 3 securities you can take a loan against:
- Equity Shares:
This type of loan is secured against equity shares in an investor’s portfolio. The investor can decide which shares to pledge to the bank. The bank has its own loan to value ratio for determining the amount that will be given as a loan. Most banks have this value at 50-60% which means even if the equity markets fall, there is enough margin of safety and the bank does not need to sell off the shares to recover the loan. These shares can be pledged from either Central Depository Securities Limited (CDSL) or National Securities Depository Limited (NSDL), the two depositories in India.
- Mutual Funds:
One of the newest is Digital Loan Against Mutual Funds This loan are given out against both Equity and Debt Mutual Funds. A loan can be availed up to 50% of the value of equity Mutual Fund, whereas 80% of a Debt Mutual Fund’s value is available as a loan. HDFC Bank customers can avail this loan within a matter of minutes by pledging their Mutual Fund units in CAMS.
Read more on the eligibility and document requirements for a Digital Loan against Mutual Funds.
- Other options for NRIs:
There are other such loan options for NRIs. They can avail Digital Loan against Securities by pledging assets such as Insurance policies, National Savings Certificates (NSC), Kisan Vikas Patras (KVP), in addition to Equity Shares and Mutual Funds.
A Digital Loan against Securities is a convenient option to avail funds quickly, especially, in cases of emergencies. Consider this option as well when you urgently require funds.
Looking to apply for a Digital Loan against Mutual Fund? Click here to get started!
* Terms & conditions apply. Digital Loan against Mutual Funds disbursal at sole discretion of HDFC Bank Ltd.
