Loan Against Bonds

A Loan Against Bonds is a form of Loan Against Securities (LAS) where individuals pledge their bond holdings as collateral in exchange for funds. This form of funding against fixed-income securities is ideal for individuals who need liquidity but do not want to sell their fixed-income instruments.

Whether you're facing a temporary cash crunch, funding a business expansion, or dealing with a personal emergency, borrowing against bonds allows you to raise funds while continuing to earn periodic interest from your investments.

Let’s explore how a secured Loan Against Bonds works, along with its key benefits, eligibility criteria, required documents, applicable charges, and the step-by-step application process.

Features and Benefits of a Loan Against Bonds

Here are some of the key features and benefits of taking an SMFG India Credit Loan Against Bonds:

Preserve Your Investments: Your bonds remain intact, and you continue to earn interest. There's no need to liquidate assets, which helps in long-term financial planning.

Attractive Loan-to-Value (LTV): Depending on the bond type, issuer, and your eligibility, you can avail of up to 50 to 85%* LTV.

Competitive Interest Rates: Given the secured nature of the loan, interest rates on Loan Against Bonds are typically lower than those for unsecured financing options such as personal loans or credit cards.

Quick Processing: Applications are typically processed quickly, made even more convenient by an online process with minimal documentation requirements.

*Terms & Conditions apply

Eligibility Criteria for a Loan Against Bonds

Before applying, it’s essential to understand our eligibility criteria for a Loan Against Bonds, which are quite straightforward. The applicant must:

• Be at least 21 years old.
• Be able to demonstrate a valid proof of income.
• Hold a Savings, Current, and Demat Account.
• Hold approved bonds with a minimum value of INR 10 lakhs.
• Have a credit score of 600 or above.

*Please note that this is only the basic eligibility criteria. The final eligibility will depend on a number of parameters, including the SMFG India Credit’s policy at the time of loan application.

Who Can Apply for a Loan Against Bonds

SMFG India Credit offers Loan Against Bonds solutions for a wide range of customer profiles. You may be eligible to apply under one of the following categories:

1. Individual Customers
   This includes Indian resident individuals who hold eligible bonds in their name and meet the standard eligibility requirements.
2. Non-Individual Customers
   Organisations and business entities can also apply for a Loan Against Bonds. Eligible non-individual categories include:

• Companies (Public or Private Limited)
• Partnership Firms
• Limited Liability Partnerships (LLPs)
• Sole Proprietorships
• Private Trusts
• Hindu Undivided Families (HUFs)

Documents Required for a Loan Against Bonds

Here is a checklist of the documents required for a Loan Against Bonds:

* In line with your Know Your Customer policy
**As applicable

If a co-applicant is included, their essential documents, such as PAN and KYC proofs, will also need to be submitted.

The above list is only illustrative. Based on the specific loan product, your profile, and our policy at the time of loan application, additional documents may need to be provided.

Things to Keep in Mind:

• Carry your original identity and address proofs, along with other required documents, for onsite verification. This may not be required in the case of digital KYC.
• Where the address proof fails to display your current address, one of the approved Deemed OVDs can be submitted. Click here to view the full list.
• An OVD showing your current address must be provided within three months of the initial address proof submission.

Interest Rates and Charges for a Loan Against Bonds

The applicable Loan Against Bonds interest rate is influenced by several factors, such as the type of bonds, their current market value, and the borrower's overall eligibility and creditworthiness.

Beyond the interest component, borrowers should be mindful of additional fees and charges that may apply. These can include:

• Processing fees
• Stamp duty/registration (as per the relevant state laws)
• Annual maintenance/renewal charges
• Late payment penalties
• Liquidation charges*

To avoid any surprises, it’s important to thoroughly review the loan agreement, understand all applicable terms and fees, and confirm details with your lender before proceeding. This ensures better financial planning and full transparency.

*Applicable for Securities in demat form.

How to Apply for a Loan Against Bonds

Here’s a simple step-by-step guide to applying for a Loan Against Bonds at SMFG India Credit:

1. Click here to start your application..
2. Fill in your basic personal and bond-related details as requested.
3. You’ll receive a reference number, and our representative will reach out to guide you through the next steps.

If you prefer applying in person, visit your nearest SMFG India Credit branch and speak with a customer care representative. You can also reach us at our toll-free number 1800 419 8900 from 9:00 AM to 7:00 PM (on all days except Sundays, the 4th Saturday of the month, and public holidays), or write to us at [email protected].

Need Funds Fast? Avail of a Loan Against Bonds Today!

A Loan Against Bonds offers a practical way to unlock the value of your fixed-income investments without disrupting long-term financial goals. By choosing to pledge bonds for a loan, you can ensure liquidity while still retaining ownership and continuing to earn interest.

At SMFG India Credit, we offer flexible Loan Against Securities solutions ranging from INR 5 lakhs to INR 20 crore*, with competitive interest rates and a hassle-free online application process. Apply today to make the most of your bond portfolio.

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