A loan against shares is a popular financing option for those who want to access liquidity without liquidating their investments. It allows investors to leverage their shares as collateral and borrow funds against them. In India, several lenders offer loans against shares, but choosing the right lender is crucial to ensure that you get the best terms and conditions as per your requirement. Here are some tips on how to choose the right lender for your loan against shares in India.
1.Research and Compare Lenders
Before applying for a loan against shares, it’s essential to research and compares the lenders in the market. You can start by checking the interest rates, processing fees, prepayment charges, and other terms and conditions offered by different lenders. You can also read online reviews and ratings to get an idea of the customer experience and satisfaction.
Or simply apply for a loan against shares through a financial distribution services company like Rurash Financials which will simplify your research and comparison tasks and a designated loan officer will give suggest the best options.
2.Check the Loan Value Ratio (LTV)
Loan to Value (LTV) is the ratio of the loan amount to the market value of the shares pledged as collateral. It’s essential to consider because it determines how much you can borrow against your shares. Different lenders have different LTV ratios, and some lenders may offer a higher LTV ratio than others. It’s essential to choose a lender that provides a high LTV ratio, but it’s also important to keep in mind that a higher LTV ratio may come with higher interest rates or processing fees.
3.Check the Eligibility Criteria
Each lender has its eligibility criteria for a loan against shares. It’s important to check the eligibility criteria before applying for a loan to ensure that you meet the lender’s requirements. The eligibility criteria may include factors such as age, income, credit score, and the type and value of shares pledged as collateral.
4.Check the Processing Time
Always check the processing time for your loan requirement. The application procedure and processing time of a loan against shares can vary depending on the lender. Some lenders may offer a faster processing time than others. If you need the funds urgently, it’s important to choose a lender that offers a quick processing time. However, it’s also important to keep in mind that a faster processing time may come with higher interest rates or processing fees.
5.Check the Prepayment Charges
Prepayment charges are the fees charged by the lender if you decide to repay the loan before the due date. It’s important to check the prepayment charges before applying for a loan against shares to avoid any surprises later on. Some lenders may charge a higher prepayment fee, while others may not charge any prepayment fee at all. It’s important to choose a lender that offers a reasonable prepayment fee or no prepayment fee at all. A financial distribution company like Rurash Financials can help you find the best loan against shares provider and a designated officer will also facilitate the entire process.
6.Check the Reputation of the Lender
The reputation of the lender is an important factor to consider when choosing a lender for a loan against shares. You can check the reputation of the lender by reading online reviews and ratings, checking the lender’s history, and researching the lender’s financial stability. It’s important to choose a lender that has a good reputation and is financially stable to ensure that your investment is safe.
If you need quick funds and have shares in your investment portfolio, Rurash Financials can help you access instant loan against shares from the most trusted lenders in India. With our hassle-free loan against-shares facilitation process, you can easily unlock the value of your securities without having to liquidate them. We work with the most trusted lenders in the market to provide you with competitive interest rates and flexible repayment terms.
In conclusion, choosing the right lender for your loan against shares in India is crucial to ensure that you get the best terms and conditions. It’s important to research and compare lenders, and check the loan-to-value ratio, eligibility criteria, processing time, prepayment charges, and the reputation of the lender. By following the above tips, you can choose the right lender for loan against shares and a facilitator like Rurash Financials can help you source funds for a loan amount of Rs.10 lacs to upto 100 Crores by helping your source the funds from multiple lenders.
