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Monday, January 6, 2014

Points you should know about loan against shares

Loan against shares is a loan which is very less in practice as the equity market is full of up and down and the financial services are also not much interested in giving loan against shares. But theses points one should know about loan against shares.

1. If you will need a loan against ones shares, it will be easier for those who have a demat account with all your bank.

2. The lender will grant financing by marking a lien for the shares it holds within the demat account.

3. The margin will be as high as 50 per cent depending on the underlying security. The margins with regard to shares is high as their value is quite volatile.

4. The dividend will still be credited to your money even if the particular shares are presented in lien. The lien will be lifted the lien will be lifted when a person repay the mortgage.

5. The bank that is also a depository participator may offer pre-sanctioned financial loans on shares held within the demat account mainly because it is easier with the bank to execute such loans.
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