High loan amount- Loan against Securities offers loan amount as high as 10 crores.
Lower Interest Rates- The interest rates of Loan against securities is lower as compared to Credit Cards or personal loans. It varies from bank to bank and usually ranges between 9% – 15%.
Lower Installment- Loan against securities offers an option of paying only the interest amount as EMI and the principal amount can be paid at the end of the tenor or even earlier, whenever the customer has sufficient funds to pay back the loan amount.
Also, the interest is calculated only on the amount withdrawn and not on the entire approved loan amount.
No Liquidation of securities- With Loan against securities, the returns on investments are not hurt. Therefore, by giving securities as collateral you kind of raise money without any cost. Since, there is a great chance that interest that you are earning from your securities is covering the nominal interest that you are paying for the loan.
No Hidden Cost- There are no hidden charges to get a Loan against Securities. Usually there is an upfront payment, or processing fees, all of which are disclosed at the time of application.
Unrestricted Cash Withdrawal- There is no cash withdrawal restriction in Loan against Securities. One can withdraw as much cash as they need up to the loan limit. You can withdraw the entire loan amount in cash. However, credit cards have a cash withdrawal restriction due to which even at the time of emergency one cannot withdraw cash.
Flexible Repayment- Loan against securities offers the option of flexible repayment as only the interest component has to be paid and, the principal component has flexible repayment option. It can be repaid at any time within the tenor of the loan amount.