Loan against shares and securities is a popular form of financing in the market today. It is fast emerging as a go-to option for people looking for funds immediately.. A loan against securities can be availed real quick and easy just by pledging securities such as shares, mutual funds, bonds, and other securities as collateral. Rurash Financials is a leading financial services company that facilitates loans against shares and securities from the most trusted lenders in the industry at an interest rate as low as  8.5%. This makes loan against shares a cost-effective and beneficial financing option for people who are looking for immediate funds without diluting their investments or savings. 

In this article, we will discuss the top 7 attributes of a loan against shares.

1. Lower Interest Rates

Rurash Financials helps you get the loans against shares and securities from the leading and most trusted institutions at an interest rate as low as  8.5%, which is relatively lower compared to other loans, such as personal loans or credit card debt. This is because the borrower is providing collaterals in the form of securities, which reduces the lender’s risk. The lower interest rate makes the loan affordable and helps in the repayment process. Additionally, the loan against shares comes with zero foreclosure charges. 

2. High Loan Amount

In the usual scenario, the loan amount that can be availed against shares and securities depends on the market value of the securities or they come with a certain limit. Rurash Financials helps you get the best possible market value of the securities as the loan amount, which is substantially higher than other loans. Also, the designated loan officer at Rurash Financials will help you get a loan anywhere between Rs.10 lac to upto Rs.1 Crore even if that is to be sourced from one or more lenders.  This means that a person with a portfolio of high-value securities can get a larger loan amount to meet their financial requirements.

3. Quick Disbursement

Rurash Financials offers quick disbursement of loans against shares and securities. Once the borrower has pledged the securities as collateral, the loan process is expedited, and the funds are disbursed within a few days. The quick disbursement process is beneficial for people who need urgent funds. Additionally, we take utmost care for customer convenience and hassle-free loans.

4. No Prepayment Charges

 There are no prepayment charges on loans against shares and securities. This means that the borrower can prepay the loan amount anytime without incurring any additional charges. The no prepayment charges feature provides the borrower with the flexibility to repay the loan early, which can save them a significant amount of money on interest payments.

5. No Impact on Credit Score

Applying for a loan against shares and securities does not affect the borrower’s credit score. Largely there is no credit check on the borrower, as the securities pledged act as collateral. Also, any sanctioned loan against securities does not show up on the credit report, which means that the borrower’s credit score remains unaffected.

6. Flexible Repayment Options

Loan Against Securities come with flexible repayment options. The borrower can choose from various repayment options, such as monthly interest payment or bullet payment at the end of the loan tenure. The borrower can choose the repayment option that suits them the best, based on their financial situation.

7. Retain Ownership of Securities

One of the significant advantages of availing a loan against shares and securities is that the borrower can retain ownership of the securities. The borrower does not have to sell their securities to avail of the loan. The borrower can continue to earn dividends, capital gains, and interest income from their securities while also using them as collateral for the loan.

Conclusion

A loan against securities is a cost-effective and beneficial financing option. The loan is provided against securities such as shares, mutual funds, bonds, and other securities. Rurash Financials is a leading financial institution that helps you facilitate loans against shares and securities at a rate of interest as low as  8.5%. 

To explore more about loans against securities or to check your eligibility score for the same, connect with the team now. 

Getting personal loans can be a faster way to get the cash you need for things like home renovations, medical bills you didn’t expect, the start of a business, or even a vacation.

But if you want to get a bank personal loan in Singapore, you will need to go through the step of client verification, which will affect how your loan application turns out in the end.

Personal loans, unlike secured loans like mortgages or car loans, aren’t usually backed by anything like a house or car. This is the main reason why personal loan applications must meet strict eligibility requirements before they can be approved.

Lenders look at a number of things when deciding whether to give a person a personal loan. These include the person’s credit score, income, ongoing EMIs, job, age, and past payment history.

Let’s take a closer look at the different things that come into play when banks and other financial institutions look at the personal loan applications that people send in.

Factors Considered by Banks before lending personal loan

By getting bank loan in Singapore, you might be able to grow your business and take it to new heights of success. 

Banks are usually more careful when giving loans to self-employed people or business owners, you will need to show the bank your business plan and show that you have a good history of running a business well.

People who are in a bad situation, like having a lot of debt, so it is important to be clear about what you need and how you plan to pay it back. People who are in a bad situation will have a hard time getting loans from banks (such as having a lot of debt).

Banks often look at the “5 C’s of credit” when deciding whether or not to give you a personal loan. These are capacity, collateral, capital, character, and conditions.

Capacity

Before doing anything else, the bank will check to see if you can pay back the loan. When someone wants to get a loan, they have to give the bank a letter that says they give the bank permission to check their credit history.

Banks will look at both how well you’ve paid other people in the past and how much debt you already have.

The banks will then look at your income and figure out how well it covers your debt service. Most of the time, a bank will need a debt payment coverage ratio of at least 1.20 times.

 Collateral

Due to the general possible risk, the bank may sometimes ask the applicant for collateral or security. Even the healthiest businesses can sometimes slow down because of things they couldn’t have planned for. This can make it hard for them to pay back loans.

What kind of collateral a bank can ask for depends on what kinds of assets it has. Real estate, business assets, pieces of equipment, cars, savings accounts, fixed deposits, and other financial instruments are all examples of these types of assets.

At the time a loan is approved, the borrower may have to give the bank permission to put a lien on any assets that are being used as collateral.

If you can’t pay back the loan, the lien may give the bank the right to take ownership of the assets and sell them to get the money it lost back.

Capital

Banks will look at your company’s financial history and record. They will also look at your company’s capital, which is the amount of money the company has available to use.

If the bank finds out that the company doesn’t have enough money, it can turn down the loan request because it may see the request as having too much risk.

Banks will also look at how much money you’ve already put into your business. This shows how much you care about the success of your business.

If the bank finds out that your personal finances are much better than those of the company, it is possible that the bank will still give you the loan as long as you provide a personal guarantee.

Character

Before deciding whether or not to give you a loan, a lender will do a thorough look into the history of your business, your references, and the reputation of your company.

Your chances of getting a personal loan are much higher if you and your business have good credit, a good reputation, and reliable references.

Even if you have a good credit score, banks may be hesitant to give you a loan if your company has a history of not paying its debts or a bad reputation, even if you meet all the other requirements.

Conditions

Even though you may not have much control over it, a bank will also look at how your business’s economy is doing.

Even if your business can meet the requirements for capacity and collateral, a bank may still say no to your loan request if you work in a high-risk industry.

This is because of a number of things, including the fact that the industry could suddenly go down, which would put the loan from the bank at risk.

To make it more likely that your loan application will be accepted, you will need to show that you can handle tough economic times and that you are good at running a risky business with a lot of knowledge.

Age

When deciding whether or not to give a loan, financial institutions look at a number of factors, such as the age of the applicant.

People between the ages of 30 and 50 are usually seen as financially stable, so banks give loans to people in that age range more often.

People in this age range have worked for a few years and still have a few years left to pay back their personal loan without much trouble.

People over the age of 60 may find it hard to get a personal loan, and they may have to put up collateral before a bank will approve their loan application.

Experience

One of the most important things banks look at is how much experience someone has. For example, someone with 15 years of experience will be chosen over someone who is just starting out or who has only two or three years of experience.

When deciding who gets a loan, banks like to see that a potential borrower has been working in the same field for a while.

If a person has a history of changing jobs often, a bank might be hesitant to give them a loan quickly.

Loan Amount and Repayment Period

The amount of time borrowers have to pay back their loans is another thing that banks take into account when deciding how much to lend. Most of the time, they give priority to applicants who choose a faster payback plan.

For example, someone who asks for a shorter loan repayment period of two to three years will be given priority over someone who asks for a longer loan repayment period of ten years or more, and so on.

Credit Score

When a salaried professional applies for a personal loan, a lender will look at the applicant’s credit score as the first step in deciding whether or not to approve the loan.

If your credit score is over 700, which is considered good, you may be able to get loans with lower interest rates. Your credit score shows how likely you are to be able to pay back a loan based on your financial history.

Your credit score is based on the different types of loans you are currently paying off or have paid off in the past.

Your credit score is based on how much debt you have, how often you have paid off loans, how often you have paid off credit card debt, and how many monthly installment payments you have missed.

Current Income

The bank will look at more than just your regular expenses and sources of income when deciding how much money to lend you.

Representatives from the bank will look at how much debt you already have before agreeing to give you another loan. This includes any home or car loans you still have to pay off, as well as your regular bills and expenses.

Lenders will look at your debt-to-income ratio, which is your total monthly debt payments divided by your gross monthly income. At the very least, your total debt should be less than half of what you earn each year.

Employment History

The applicant’s work history is also looked at as more proof of their income and stability. 

Before giving out loans, creditors want loan applicants to show proof that they have a steady source of income. 

High-risk borrowers are people who apply for loans but often change jobs or don’t have a steady source of income.

A good employment history shows that you have been working in the same field for a long time and that you have kept steady work.

Even though this is the case, you don’t have to have worked for the same company for your whole career. 

People who work for themselves are usually looked at more closely than people who get a steady paycheck every month.

Occupation

Your job is another important thing that will be taken into account when looking at your loan application. Some jobs, like working for the government or a public or private university, are more appealing to banks than others.

After that, banks give priority to people who work for “blue-chip” companies and other safe professions, like doctors, chartered accountants, engineers, and lawyers.

Most of the time, the least attention is paid to applicants who work for themselves or for a private company.

 If a person applies for a loan while working for a company that has a bad history of paying its employees’ salaries, the application is not likely to be approved.

A candidate who is known for switching jobs often gives off the same kind of bad impression as the first candidate. 

But bank applications are looked at the same way no matter if the applicant works for the government or the private sector.

Repayment History

The borrower’s history with credit and paying back loans is another important thing that banks look at. 

Unpaid debts can stay on your credit report for up to seven years. This can hurt your credit score and make it harder for you to get loans.

Banks may be hesitant to give you a personal loan if you have a history of not paying back loans on time or if you have debts that you haven’t paid off.

Amount of Loan

One of the most important things that financial institutions look at is how much credit the borrower has asked for.

When the loan amount is higher, the bank will do a more thorough underwriting, and it may also ask for collateral to reduce its risk.

On the other hand, a loan application for a smaller amount of money can be approved more quickly if you have a good relationship with the bank.

Before agreeing to lend you the amount you want, a bank will look at your whole financial history and other factors, such as your ability to pay back the loan.

Things to consider when looking for the best bank to apply personal loan in Singapore

Before you immediately start filling out a bank personal loan application, there are a few things you should think about first:

Types of Personal Loans available

Most of the time, a person can get a personal loan that isn’t secured for up to ten times their monthly salary.

Most of the time, the bank interest rate on an unsecured personal loan is higher because the borrower doesn’t have to put up anything as collateral. When a borrower falls behind on payments, the lender can take legal action to get the money back.

Check out equity loans if you want a personal loan with a longer repayment period, a lower interest rate, and a higher loan amount than what traditional options with an offer.

If you get a loan based on your equity, you can use the value of your home as collateral. A loan against the equity in your home can be a much cheaper way to borrow money than an unsecured personal loan, especially if the value of your home has gone up over the years.

Is a bank personal loan the best for you?

On the market, there are a lot of loan products to choose from. If you make the right choice, it will better meet your needs and allow you to save both time and money.

For example, instead of getting a personal loan, you could apply for a loan to consolidate your debts. This would let you pay off larger amounts of credit card debt all at once.

If you want to fix up your house, you might want to get a loan for home improvements instead of a personal loan so you can use the equity you’ve built up in your property.

The amount you can borrow 

Just like with any other loan, there is a maximum amount that each person can borrow. Even though the amounts available for personal loans are often less than those available for mortgages or business loans, the maximum loan amount that can be approved depends on a number of factors, such as your credit score and income.

In a more immediate sense, if you are thinking about getting a loan, you should first look at what you already own. If you look at how much money you make and how much you spend, you should be able to figure out how much money you can borrow.

Choosing the right lender for your Personal Loan in Singapore

When there are so many banks and credit unions that offer the best personal loans, it can be hard to know where to start looking.

If you don’t know the right questions to ask, it may be hard to figure out which position you should apply for. 

You’ll find that every lender, bank, and other financial institution has its own unique products, interest rates, and terms and that these things are all different from one another.

The next big problem will be deciding what to use as a comparison point. Why go through the trouble of looking for a loan when you can get free help choosing the best loan product from the many options?

If you have put your money in mutual funds, you can use your investment as collateral to unlock quick capital in emergencies. Did you know that?

Life is unpredictable and full of uncertainties. Who knows what is coming next? There are times when you experience a temporary money crunch. The reasons that may raise the need for urgent cash could be a home renovation, a wedding in the family, a medical emergency, or anything. Irrespective of whatever it might be, the first idea in mind is to liquidate your investments even at a loss. The other, or rather a better plan of action, is to approach a bank or NBFC like Abhi Loans to apply for a loan against mutual funds.

Yes, you can use your MF units as collateral to get a loan and deal with such cash-strapped situations. Just as you can pledge your other assets, such as gold or property, for a loan, you can get a loan against your Mutual Funds holdings from a financing institution, such as Abhi Loans.

You can get a loan only up to a limit of your MF holdings

The loan amount against your mutual fund holding depends on the type of MF scheme you have invested in and the lender from which you take the loan.

Different financial institutions have different loan limits. For example, HDFC and ICICI offer a loan of up to 50% of the Net Asset Value (NAV) of equity mutual funds and up to 80% of the debt mutual funds. On the other hand, Abhi Loans, a leading NBFC, provides 65% of the value of equity mutual funds and 75% of the value of debt mutual funds.

Not all bank offer loan against mutual funds

Many banks are selective about the mutual fund schemes against which they offer loans. They lend money only against a set of selected schemes. SBI, for example, approves loans only against schemes of SBI mutual fund. In the case of HDFC and ICICI, they lend money against the mutual fund schemes managed by asset management companies registered with Computer Age Management Solutions Private Limited (CAMS).

There is an upper limit on the loan amount

Like unsecured loan types, the loan against mutual funds, loan against stocks, and loan against securities have an upper limit. That means banks have a maximum and minimum limit on the amount they lend. If you approach a bank instead of an NBFC, the maximum loan limit will be relatively low as the latter generally offer more flexible and higher amounts for the loan against securities. At Abhi Loans, a pioneer lending institution, you can borrow up to Rs. 1,00,00,000 on your equity and debt MF holdings.

Less costly than personal loans and credit card loans

While the interest rates of a loan against mutual funds are lower than credit card loans or personal loans, borrowers do not have to pay much processing fee. That is because it is a secured loan backed by collateral. Generally, the interest rate for a loan against securities could be between 13% and 16% per annum, depending on the EMI plan taken and the lender chosen.

MF units stay invested even while you pledge them

Even when pledged, your MF units stay linked to the market and continue to earn you dividends and returns. However, if you default to pay back the loan, the lender has the right to sell them. The fact of the matter is that your financial plans remain unobstructed, as you won’t need to redeem your units.

The facility of online application

Banks and NBFCs, including Abhi Loans, give borrowers the facility to avail of a loan against securities digitally, thanks to technology. Everything, from submitting the documents to marking the lien, is possible online. And if you borrow money from Abhi Loans, it would take just 4 hours to get the amount disbursed.