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How To Get a Loan Against Securities at a Low Interest Rate?

Ever been in a situation where you needed some extra money but didn’t want to let go of your investments? There’s a simple way out! But here’s a question – what if you could get a loan without the burden of high interest? Imagine getting the funds you need, keeping your investments intact, and not being weighed down by hefty interest payments. Sounds ideal, doesn’t it?


What is a Loan Against Securities?

As the name suggests, A loan against securities means you can borrow money by using your assets or investments as a guarantee. These can include things like mutual funds, stocks, ETFs, bonds, and insurance policies. It’s like having a safety net; you can get a loan without selling off your investments, and they keep growing and earning for you. 

So, you’re probably wondering, how much can you borrow? Well, you can get a loan for up to 95% of the value of your investments. The exact amount depends on what kind of investments they are, how much they fluctuate in value, and what the market conditions are like. 


Benefits of Opting for a Loan Against Securities? 

Following the detailed explanation of what a loan against securities is and the finer details of interest rates, let’s turn our attention to the many benefits that come with this type of loan. Knowing these advantages can make the decision easier for many when looking at their options for quick financial help.

  • Immediate Liquidity: One of the benefits of a loan against securities with low interest rate is instant access to cash. There’s no need to sell your investments, allowing them to continue appreciating in value. It provides a hassle-free solution to meet your immediate financial needs while keeping your investment portfolio intact.
  • Lower Interest Rates: As previously highlighted, loans against securities typically offer lower interest rates compared to other forms of credit, like personal loans or credit cards. It means you can access funds without the heavy burden of high-interest debt, making the repayment process much more manageable.
  • Flexibility in Usage: The proceeds from this type of loan aren’t restricted to specific uses. Whether you’re looking to expand your business, fund education, manage a medical emergency, or even take that dream vacation, the flexibility in utilizing the funds stands as a significant benefit.
  • Continuation of Earnings: Even as your securities are pledged, in many instances, you continue to earn dividends or interest on them. It ensures that your assets are still working for you, contributing to your financial growth even as they secure your loan. 
  • Quick and Easy Process: The application and approval process for loans against securities is often straightforward and quick. Minimal paperwork and faster disbursements ensure that you have timely access to the funds when you need them the most. 

Getting a loan against securities is usually less expensive than taking out a personal loan. The interest rates are generally lower, which means you won’t feel too much of a pinch when it’s time to pay back. And if you choose a shorter time to pay back or use high-value investments as your guarantee, those rates can go even lower. 

But hold on, interest rates can depend on a bunch of different things, and it’s important to understand what those are. Let’s take a closer look at them.

Exploring Factors that Influence Interest Rates

After learning about what a loan against securities is and its benefits, it’s vital to look into the details of the interest rates. Since these rates are crucial in figuring out how helpful the loan will be for you, knowing the elements that affect them can give you the information needed to get the best deal possible. 

  • Type of Security Offered: Firstly, let’s talk about the assets you are using as collateral for a loan against securities with low interest rate.. Different investments have different levels of risk and return. Lenders look at these aspects to set the interest rate. For instance, if you’re using mutual funds as collateral, the lender will look at the fund’s performance and stability. The more stable and reliable it is, the more favorable your interest rate could be.
  • Loan Repayment Time: The time you choose to pay back the loan is another factor. Generally, if you decide to pay back your loan quickly, you might get a lower interest rate. It’s all about finding the right balance – a repayment period that doesn’t stretch your finances too thin but still offers a good interest rate.
  • Market Conditions: Lastly, The overall economic scenario and market trends play a role too. Interest rates can be influenced by economic indicators like inflation, economic growth, and policy changes by central banks.                                                          Gain further insights into effective investment tracking by reading our article, ‘Understanding CAS and Its Importance’.

Making the Right Choice with the Right Financial Partner

Given the benefits and factors influencing interest rates, the cherry on top is selecting the right financial institution or lender. This choice can make things easy, affordable, and smooth. FinEzzy is one such lender that offers loan against mutual funds at good rates, starting as low as 7.46% p.a. 

What’s great about FinEzzy is that they make the whole loan process simple and clear. This means you can get a loan without any fuss or confusion. Plus, the low-interest rate makes sure you can easily pay back without any stress. 

Taking a loan can sometimes feel scary. But with the right help, it becomes a smart way to get money when you need it. This way, you don’t have to touch your investments, and they keep growing for you. 

So, there you have it. A loan against securities or mutual funds doesn’t have to be a complex process. It can be a straightforward and manageable way to get the financial support you need without dipping into your savings or selling your investments. With partners like FinEzzy, you are guided through each step, ensuring a hassle-free and rewarding experience. Always remember, that the key to a successful financial journey lies in understanding your options and making informed decisions. 

Add Your Heading Text Here

It’s a loan where you can borrow money using your investments like mutual funds, stocks, or bonds as collateral. It means you can get the money you need without selling off your investments.

FinEzzy offers competitive interest rates for loans against mutual funds, starting as low as 7.46% p.a. It makes the repayment easier and budget-friendly.

Yes, one of the benefits of this loan is its flexibility. You can use the funds for various needs, whether it’s a business expense, education fees, or a personal expense.

Absolutely, your investments continue to earn for you even as they serve as security for your loan. You don’t miss out on the earnings.

With FinEzzy, the process is quick and straightforward usually within 15 minutes. Minimal paperwork is needed, ensuring you get the funds right when you need them.

Frequently asked questions

All investments have some risk. But mutual funds try to reduce risk by investing in many different things. So, if one thing doesn’t do well, the other might make up for it.

We tailor our advice and suggestions to your needs. If wealth management is your goal, our algorithms go through millions of data points to come up with suggestions that sit perfectly with your risk appetite, existing financial goals and the prevailing market conditions. If you are interested in credit, we address the need while also ensuring you do not compromise on your broader financial goals.

Most mutual funds let you take out your money when you want. But some might have rules or charges if you take it out too soon.

To start, you can talk to a bank or a financial advisor. They can guide you on how to put your money in a mutual fund.

Yes, there might be some charges. These are for managing the fund and other services. It’s good to ask about these before you invest.

No, you don’t need a lot of money. Many mutual funds allow you to start with a small amount as low as INR 500.