Can I Get a Loan Against My Financial Assets?
Last Updated : April 3, 2020, 3:41 p.m.
Financial assets are instruments that help you meet your personal and business needs. These assets can be your home, gold life insurance, mutual funds, shares, bonds, fixed deposits, national savings certificate, etc. You can get a loan against any of these financial instruments to fulfill your needs. While loans granted against your home asset are termed as loan against property, loans given on behalf of others come under the category of loan against securities. How will the loan against each of these assets work to your advantage? We will detail you all, so keep reading!
Loan Against Property
This loan can be granted to the tune of 60%-80% of the property value. It can be given for any personal or business purposes. Often people arrange funds against their homes for purposes such as education of their children. The interest rates are comparatively lower than in the case of personal loans. The disbursal of loan is also contingent on paying the applicable processing and doing several other formalities like document submission.
| Lenders | Interest Rate (In Per Annum) | Max. Loan Quantum | Max. Tenure | Processing Fee |
|---|---|---|---|---|
| State Bank of India (SBI) | 9.20%-10.75% | Upto INR 7.5 Cr, subject to 60%-65% of the property value | Upto 15 Years | 1% of the loan amount, upto a maximum of INR 50,000 |
| HDFC Limited | 9.40%-11.50% | Upto 50%-60% of the market value of the property | Upto 15 Years | Upto 1.50% of the loan amount, subject to a minimum of INR 4,500 |
| ICICI Bank | 10.30%-10.40% | Upto INR 5 Cr, subject to a cap at upto 70% of the property value | Upto 15 Years | 1% of the loan amount |
| Axis Bank | 11.25%-11.75% | Upto INR 5 Cr | Upto 20 Years | As applicable |
| PNB Housing Finance | 10.25%-11% | Upto 60% of the market value of the property | Upto 20 Years | 1% of the loan amount |
| LIC Housing Finance | 9.50% - 10.50% | Upto INR 50 Lakh | Upto 15 Years | 1% of the loan amount |
| Bank of Baroda | 8.45%-13.25% | Upto INR 10 Cr | Upto 15 Years | 1% of the loan amount |
Loan Against Mutual Funds
Loans against mutual funds can be granted in line with the value of your investment. Plus, lenders also consider the frequency in the up and down of the investment value. The loan against Equity mutual funds, which invest a massive proportion of around 80%-90% in the high-risk, high-return proposition of equities, can be granted upto 50% of the investment value. Whereas, debt funds, which invest heavily in fixed income instruments, can garner as much as 80% loan on the investment value. While some banks disburse term loans, some provide an overdraft facility against mutual funds. Term loans will be paid via the EMIs. Whereas, with an overdraft facility, the amount will be sanctioned and get deposited to a savings or current account. The interest will apply only to the utilized amount and get calculated on the daily outstanding balance.
| Lenders | Interest Rate (In Per Annum) | Max. Loan Quantum | Processing Fee |
|---|---|---|---|
| State Bank of India (SBI) | 9.75% | Upto INR 20 Lakh when offered against equity/hybrid funds Upto INR 5 Cr when offered against debt funds/fixed maturity plans | 0.75% of the loan amount |
| HDFC Bank | Depends on the movement of NAV | Upto 50% of the NAV in case of loans against equity funds Upto 80% of the NAV in case of loans against debt mutual funds/FMPs | 1% of the loan amount |
| ICICI Bank | Depends on the movement of NAV | Upto 50% of the NAV, subject to a cap of INR 20 Lakh | 0.50% of the loan amount |
| Kotak Mahindra Bank | Depends on the movement of NAV | Upto 50%of the NAV in case of loans granted against equity mutual funds Upto 85% of the NAV in case of loans granted against debt mutual funds | Upto 2% of the loan amount |
| Axis Bank | 10.50%-12.75% | Upto 85% of the market value | As applicable |
Loan Against Shares
Stock markets are much more volatile than mutual funds because of the lack of diversification in the former. The loan quantum can be upto 50% of the present market value of the stock. While some banks disburse term loans, some provide an overdraft facility against shares. Term loans will be paid via the EMIs. Whereas, with an overdraft facility, the amount will be sanctioned and get deposited to a savings or current account. The interest will apply only to the utilized amount and get calculated on the daily outstanding balance.
| Lenders | Interest Rate (In Per Annum) | Max. Loan Quantum | Processing Fee |
|---|---|---|---|
| State Bank of India (SBI) | 9.75% | Upto INR 20 Lakh, subject to a cap of 50% of the market value of shares | 0.75% of the loan amount |
| HDFC Bank | Depends on the movement of stock prices | Upto 50% of the present value of shares | 1% of the loan amount |
| ICICI Bank | Depends on the movement of stock prices | Upto 50% of the value of shares, subject to a cap of INR 20 Lakh | 0.50% of the loan amount |
| Kotak Mahindra Bank | Depends on the movement of stock prices | Upto 50% of the current market value of shares | Upto 2% of the loan amount |
| Axis Bank | 10.50%-12.75% | Upto 85% of the market value | As applicable |
Loan Against Bonds
Bonds are issued from companies to raise capital from the public. These are relatively safer instruments compared to equities, so banks can disburse more loans when you look to get them against bonds. Generally, banks disburse loans against gold bonds, gold deposit certificates, etc. While some banks disburse term loans, some provide an overdraft facility against mutual funds. Term loans will be paid via the EMIs. Whereas, with an overdraft facility, the amount will be sanctioned and get deposited to a savings or current account. The interest will apply only to the utilized amount and get calculated on the daily outstanding balance.
| Lenders | Interest Rate (In Per Annum) | Max. Loan Quantum | Processing Fee |
|---|---|---|---|
| State Bank of India (SBI) | 9.90% | Upto INR 20 Lakh, subject to a cap of 65% of the market value of sovereign gold bonds | 0.50% of the loan amount |
| HDFC Bank (Overdraft Facility | As applicable | Upto 70% of the present value of gold deposit certificates | 1% of the loan amount |
| ICICI Bank (Overdraft Facility) | As applicable | Upto 5 Crore | 0.50% of the loan amount |
| Kotak Mahindra Bank | 9.25%-13% | 20 Lakh, subject to a cap of 85% of the face value | Upto 2% of the loan amount |
| Bank of Baroda | 11.90% | Upto 80%-85% of the face value | INR 500 |
Loan Against Fixed Deposits
You can get a loan against fixed deposits, which can be opened for a minimum of 7 days to a maximum of 10 years across banks, upto 80%-90% of the deposit amount. The interest rate on such loans can be 1%-2% above the relative time deposit rate.
| Lenders | Max. Loan Quantum | Max. Tenure |
|---|---|---|
| SBI | Upto 90% of the time value of your FD | Upto 5 Years |
| Bank of Baroda | Upto 95% of the time value of your Fixed Deposit (Principal + Interest0 | Upto 5 Years |
| ICICI Bank | Upto INR 3 Crore | Upto 7 Years |
| HDFC Bank | Upto 90% of the fixed deposit amount | As applicable |
| Axis Bank | Upto 85% of the fixed deposit value | As applicable |
Loan Against Life Insurance Policy
Banks grant loans against life insurance policies at a certain percentage of the surrender value. The loan is not applicable to term plans, rather it is given on traditional plans. While some banks disburse term loans, some provide an overdraft facility against insurance plans. Term loans will be paid via the EMIs. Whereas, with an overdraft facility, the amount will be sanctioned and get deposited to a savings or current account. The interest will apply only to the utilized amount and get calculated on the daily outstanding balance.
| Lenders | Interest Rate (In Per Annum) | Max. Loan Quantum | Max. Tenure | Processing Fee |
|---|---|---|---|---|
| Bank of Baroda | 10.75%-11.25% | Upto 80%-85% of the surrender value of the insurance policy | Upto 5 years, subject to the maturity of the policy | INR 500 |
| ICICI Bank | As applicable | Upto INR 5 Crore | Subject to the maturity of the policy | 0.50% of the loan amount |
| HDFC Bank | As applicable | Upto 80% of the surrender value of the insurance policy | Subject to the maturity of the policy | Upto 1% of the loan amount |
| Kotak Mahindra Bank | 9.25%-13% | Upto 90% of the surrender value of the insurance policy | Subject to the maturity of the policy | Upto 2% of the loan amount |
Loan Against National Savings Certificate
National Savings Certificate (NSC) is a postal office product that not only helps you accumulate funds for your future but also avail loans against the same. The rate of interest, which varies from time to time, presently stands at 6.80% per annum. The loan rates can be a couple of percent above the interest rate offered on NSC.
| Lenders | Interest Rate (In Per Annum) | Max. Loan Quantum | Max. Tenure | Processing Fee |
|---|---|---|---|---|
| Bank of Baroda | 11.90% or 0.50% above NSC rate, whichever is greater | Upto 80%-85% of the face value | Subject to the maturity of the policy | INR 500 |
| Punjab National Bank | 10.75% | Upto 80%-85% of the face value | Subject to the maturity of the policy | As applicable |
| HDFC Bank | As applicable | Upto 70% of the present value | Subject to the maturity of the policy | Upto 1% of the loan amount |
Gold Loan
The yellow metal gold can help you by securing funds when you need them the most. Banks disburse loans against gold ornaments to the tune of 80%-90% of the value of the ornaments. As far as repaying the gold loan is concerned, you can do it either via EMis or a bulk payment using the bullet repayment method. With the bullet method, you need to pay the principal amount as well as the accrued interest on or before the expiry of the loan tenure.
| Lenders | Interest Rate (In Per Annum) | Max. Loan Quantum | Max. Tenure | Processing Fee |
|---|---|---|---|---|
| State Bank of India (SBI) | 7.50% | INR 20 Lakh, upto 65%-75% of the value of gold ornaments | 1-3 Years | 0.50% of the loan amount |
| Muthoot Finance | 12.00% - 27.00% | No maximum limit | 1 Year | Upto 1% of the loan amount |
| Manappuram Finance | 12.00% - 29.00% | Upto 1.5 Crore | 3 Months | As applicable |
| Bank of Baroda | 7.45% - 8.20% | Upto INR 25 Lakh | 1 Year | 0.50% of the loan amount, subject to a maximum of INR 3,500 |
| ICICI Bank | 10.00% - 19.76% | Upto INR 15 Lakh | 1 Year | 1% of the loan amount |
| HDFC Bank | 9.50% - 17.55% | From 10,000 onward | 2 Years | 1.50% of the loan amount |
| Axis Bank | 13.00% | Upto INR 20 Lakh | 3 Years | 1% of the loan amount |
| Kotak Mahindra Bank | 10.50% - 17.00% | Upto 65%-75% of the value of gold ornaments | 4 Years | Upto 2% of the loan amount |
Note – The processing fee will also include 18% Goods and Services Tax (GST)