May 25, 2015 08:29 AM
4639 Views
Want urgent money to meet an urgency however you are so emotional about your stocks that you dont want to sell them or they may fetch better returns in long term then loan against shares is the best option where by you can avail an over draft facility by pledging your shares to bank. Interest will only be charged on actual amount withdrawn and for the period it is withdrawn like any other OD account. The Interest rate charged by bank is between 14-18% but may vary from time to time depending on bench marks rates.
However loan is given only against pre approved scripts which are generally A category or Blue chip stocks. A margin ranging from 20 to 40% is kept by bank ie banks fund from 80% to 60% of the value. The loan is annually reviewed and if not renewed you may have to pay the full outstanding and close the account. In case the price of the shares against the loans fall beyond a given percentage you may have to provide additional security or pay back part amount or bank will sell the stocks. The stocks shall however be in dematised form only.
I strongly recommend AXIS Bank for the same where interest rates are reasonable and loan amount is upto Rs 20 Lakhs and you can get ATM facility.
