Get Loan Against Stocks – A Perfect Way to Invest

Getting a loan against stocks is easy and quick. A person needs to fulfill the eligibility criteria of the lender, which depends upon the type of security that he wants to pledge as collateral for the loan amount. For instance, if one wants a loan against shares, then he has to place his shares in a stockbroker’s account. The lender will give him a loan at the desired interest rate and repayment period as decided by him.

These types of loans are also popularly called short-term investments. The interest rates charged for these loans are often a bit higher as compared to long-term loans. This is because the duration of the loan is usually very less and the repayment amount is also relatively lesser. So, many people who are looking forward to investing a larger amount have opted for “No Short” Stock loans. However, there are some important points that one must know before getting involved with this option.

Certain eligibility conditions have to be fulfilled by an individual to get a loan against stocks. First of all, he should be above 18 years of age. Next, he must have a fixed income that is steady and regular. He also should have a valid banking account from a reputed bank. In case, if any of the above-mentioned points are not met by the applicant, then he may still get the loan, but it will be at a higher interest rate.

Secured loans are those where the borrower is provided with a loan under the promise to repay a particular sum of money. Under such an agreement, the company or the individual lending the money promises to return a certain amount of equity in the future. This is done to minimize the risks associated with the loan and hence the interest rates are kept low. Thus, the company or individual gains by offering this type of loan at a lower rate of interest.

Unsecured loans are the ones that do not require collateral to be put up. The reason for this is that they are given without any assurance of repayment. However, to get this loan, you need to have a steady source of income and a good credit history. The companies or individuals lending money also offer other kinds of loans like home loans, business loans, etc. These loans are the ones that are taken when an individual or a company needs money fast.

People who want to get a loan against stocks can check out different websites that offer these services. They can read about the loan options available and choose one that suits them the best. Once the application is made online, it gets processed almost immediately. Moreover, once the loan is approved, the equity in the securities is converted into cash. Thus, it becomes easier for the borrowers to use the borrowed money for buying shares.