A financial crisis may arise at any time. In the event of such a scenario, it helps to have a backup plan in place. Fortunately, depending upon the urgency and need of the circumstances, you can raise capital from several avenues.
If the money you require is urgent and small, you can apply for a loan against bonds. As long as the borrower meets the eligibility criteria, many lenders offer loans against bonds.
By availing a loan against securities, you will be able to successfully tackle any emergency without having to liquidate your savings.
When you avail a loan against bonds, it enables you to finance your needs in a timely fashion without compromising your investments. Depending upon the value of the bond that you have pledged and your overall eligibility, the lender will offer you a limit for a certain amount.
You can borrow a part or the entire amount of this limit, and repay it within an agreed-upon time frame through EMIs. Each time you pay the EMI, the principal component of the same gets added back to the limit and once again becomes available for borrowing.
Interest is charged only on the amount that is withdrawn /utilized.
The terms and conditions of loans that are issued to borrowers vary across financial institutions. The following are broadly the features of a loan against bonds:
Must Read: 5 Tips to Qualify for Loan Against Securities
A borrower must broadly fulfill the following eligibility criteria to apply for a loan against bonds:
Self-employed and salaried borrowers have to submit different loan against securities documentation to avail a loan against bonds. Self-employed borrowers have to submit the following documents:
Salaried borrowers have to submit the following documents:
Looking to apply for a loan against bonds? Consider the following first:
There are two ways borrowers can apply for a loan against bonds:
* Please note that loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms and disbursal process will be subject to SMFG India Credit's policy at the time of loan application. If you are an existing customer and wish to foreclose your loan, please note that foreclosure terms and charges will be applicable as per our policy at the time of loan foreclosure.
Insurance disclaimer SMICC is registered with the Insurance Regulatory and Development Authority of India (IRDAI) as a Corporate Agent. IRDAI Registration No.: [CA0098] CIN No. U65191TN1994PLC079235. The insurance policy is a contract between the customer and the insurance company, and policy is underwritten by insurance companies. SMICC acts only as the distributor and is not responsible for any risk, policy issuance, claim settlement/repudiation etc. Insurance is the subject matter of solicitation. Purchase of insurance is voluntary and subject to insurer underwriting and policy terms and conditions. Customers are advised to read the policy terms and conditions, benefits, exclusions, claim settlement carefully before purchase. Kindly note that “Insurance Products” are not mandatory for the purpose of the application and disbursement of loan. It shall be the sole discretion of the customer, by providing explicit consent, to avail such insurance along with the Loan.
Beware of Spurious calls/ Fraud phone calls IRDAI is not involved in activities like selling Insurance policies, announcing bonus or investment of premium. Public receiving such phone calls are requested to lodge a police complaint.
