Financial emergency? Loan against securities cheaper, but comes with riders

Lenders give money against selective stocks, mutual funds and bonds

• If you are looking to borrow funds in an emergency, taking a loan against security (LAS) is a better option than liquidating your assets
• Securities a borrower can pledge include demat shares, mutual funds (equity as well as debt), insurance policies and bonds. For each of these instruments, lenders have a list of what is acceptable and what is not
• LAS comes with lower interest rates and processing fee compared to personal loans, and also has flexible repayment options
• The interest rate could vary depending on the type of security and the credit score of the borrower
• While there are no prepayment or foreclosure