What is loan against securities and what is the procedure to apply it? - letsdiskuss
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Tech Reviewer | Posted on | Share-Market-Finance

What is loan against securities and what is the procedure to apply it?


@Blogger | Posted on

People think that taking a loan is not good for your financial stability. If you are not able to repay the amount along with its specified interest amount, then the debt keeps on increasing making it very difficult to come out of that debt trap. However, this is not the case in real scenarios. People do take the loan from outside in order to safeguard themselves from the time of uncertainty.
The loan against securities is a form of an overdraft facility. This is pledged against securities like shares, bonds, etc. A loan can be against securities or share or bonds or mutual funds and this is a sought of loan wherein the borrower pledge the securities she/he has invested in as collateral against the amount of the loan.

But when comparing all these types of loans, loan against securities is the best type of loan or you can say it is the best way to make your investments work in the correct direction with efficiency and determination towards the growth.
1. The current account of the person who wants to take the loan must be opened.
2. Borrowing limit will be set by the bank which will be based on the value of the collateral.
3. You will be allowed to withdraw from the account as per your need.
4. You have to repay it by depositing the amount back into your current account.