New Delhi. Many people have lost their jobs due to Kovid 19. Because of which those people are making up their mind to start their work. For which they need money. In such a situation, they are also thinking of taking a loan in exchange for their investment in companies’ shares, mutual funds and bonds. By the way, the loan is available very easily. Many banks and NBFCs do not even ask for documents. But there are many necessary conditions in this type of loan. It is also important to look at the interest rates. Let us also tell you what you need to take care of.
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After all, how much debt can we get?
If you are planning to take a loan in lieu of an investment such as a share, mutual fund, bond or insurance policy, then you can get a loan of 50 to 60 per cent in return for the investment amount. At the same time, banks can loan more money in exchange of debt mutual funds, because there is not much fluctuation in its returns. At the same time, risk is seen more in stocks. Because of which people get less loan in return.
How much interest do you think
In lieu of shares and policies, the bank offers loans at a rate of two to three per cent higher than the home loan interest rates. This interest rate is much cheaper than a personal loan. Currently, various banks and NBFCs are giving loans in exchange for shares at rates ranging from 9.25 per cent to 18 per cent.
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Get short term loan
Loans against share-mutual funds are not available for a longer period. Banks usually provide loans for a period of three years. Banks also offer an option to repay the EMI of the total loan or to pay interest every month and finally the principal amount.
The fall in the stock market has an effect
The effect of the fall in the market is clearly seen when taking a loan in lieu of shares. The reason is that the value of your shares decreases. Because of which, in the middle of the loan loan period, you are asked to pledge the same amount of shares or repay the amount. Try to understand by example, if you pledged shares worth 10 lakh rupees, in return for which 60% ie six lakh rupees were loaned. A 10 per cent fall in the market will result in a 9 lakh rupee share. In such a situation, you are entitled to only 5.40 lakh loans. In this situation, banks demand a compensation of 60 thousand rupees.
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How much is the processing fee
In current times, many banks charge processing fees ranging from 0.10 per cent to 2 per cent. UCO Bank charges a fixed amount of Rs 250 as fee. While some banks take loans cheaper and charge more. For which you need to do a complete investigation. Indian Bank is lending at an initial interest of 9.05 per cent. While charging processing fee of close to 0.30 per cent. On the other hand, Kotak Mahindra Bank of the private sector is charging processing fee of up to two per cent.