Need emergency money? Get loan at a lower interest rate by pledging shares

Since it is a secured loan, the interest cost is lower

Bindisha Sarang
Last Updated at January 19, 2020 20:28 IST

Loan. Photo: Shutterstock

You can get a loan by using your financial assets like shares, mutual funds and life insurance policies as collateral.
The applicant should be between 21 and 75 years of age.
The loan amount will depend on the type of security pledged. You can get up to 50 per cent of the value of shares, up to 50 per cent of the net asset value of mutual funds, and up to a maximum of Rs 5 crore on life insurance policies.
NRIs, too, can avail of it.
Most such loans are given as an overdraft facility. It allows you to withdraw more money than you have in your account—up to the approved limit.
Since this is a secured mode of finance, interest rates are lower than on unsecured loans, like a personal loan.

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