When you are in a financial emergency, the temptation to sell a few financial assets can be strong. Selling in times of distress can result in financial losses and make long-term investing efforts futile. If you are in a situation where you need cash against your investments but do not want to liquidate them, you should look into Loans against Securities and shares.

Loans against securities function as overdraft facilities that a lender can obtain by pledging shares, mutual funds, or bonds as collateral. You won't have to worry about foreclosure or prepayment penalties because the process is instant and secure.

Watch the video to know more about features and benefits of loan against securities.

https://www.youtube.com/watch?v=OdOboFM … authuser=0

Why LAS?

Here’s everything you need to know about Loan Against Securities/Shares-

1. Easy repayment
You can also pay interest only on the funds you use with a loan secured by securities. The loan process is more accessible to businesses seeking short-term funding due to the ease of repayment. One of the most significant benefits of LAS is that there are almost no foreclosure charges. There are repayment terms of up to 36 months available. There is, however, a lot of leeway, and you can usually choose your tenure when it is convenient for you.

2. Flexibility in Collateral
Even if you've decided on one security, you can replace it with another equally valuable asset that will benefit you financially more during the loan application process or tenure. Assume you require a loan amount in excess of the loan amount approved. In that case, you can easily obtain it through a Loan against Securities by pledging additional shares, mutual funds, and securities.

3. Lower rate of interest and installments
When compared to personal loans or credit cards, Loan Against Securities has very low interest rates. The typical range is 8-15 percent. However, it may differ depending on the lender's requirements. LAS offers an incredible option in which you can pay only the interest as an installment or EMI over the term of the loan.
Even after the exhaustion of tenure, one can pay the principal capital. LAS loans have lower interest rates than other types of loans. Furthermore, interest is calculated solely on the disbursed amount, not the approved loan.

4. Taxation Advantage
Your investment's liquidation can have a significant impact on it, and you could end up paying up to 30% tax on it. LAS is an excellent solution to the liquidity crisis.