5 good reasons why a stock loan makes a sense - Abhiloans

5 good reasons why a stock loan makes a sense Financial emergencies may knock at your doors at any time. That is when you are in dire need of cash. And you are not always necessarily ready to deal with such situations. Although various loan options are available to help you in such hard times, not all are a good fit for you.

If you need instant cash for short-term needs, a stock loan or a loan against stocks or shares is the best way to go. With this loan option, you do not need to jeopardize your long-term investment plans. Here are four reasons why a loan against shares makes sense. But before diving in, let us first understand what a loan against securities is.

Loan against securities at a glance A loan against securities is more or less similar to a mortgage loan. While taking this loan, you agree to pledge your investments, such as equity shares, mutual funds, bonds, insurance policies, etc., to the lender as collateral. The amount of the loan you will get depends on the type and value of the securities pledged. For instance, if you choose to take a loan against stocks, you will get about 50% of the value of the shares deposited. However, in a loan against mutual funds, the amount might go up to 75% or more.

The benefits you reap A loan against securities comes with several benefits, four of which are as follows.

1. Your investment remains your When investing in the stock market, you might have long-term investment plans. You expect your shares to get you maximum benefits. But unexpected financial emergencies can spoil the whole game, compelling you to sell them off at a loss, which you do not want to incur. That is where a loan against shares may come to help you. It enables you to avail of instant cash without liquidating your assets. Since your investments remain intact, you continue to benefit from them.

2. Fast disbursal Financial emergencies give you no time whatsoever. A loan against securities could be the best option when you require urgent cash. Many landing institutions take more than 10 days to disburse the loan amount. However, if you choose to take it from Abhi Loans, disbursal is possible in just 4 hours. It is possible because the application is fully-digital and requires no manual interaction and stringent background checks. So, if you need urgent cash, a loan against securities is a way to avail of it in a matter of hours.

3. Credit history is not a constraint Usually, with other loan options, your credit history undergoes stringent checks, which might qualify or disqualify you from taking the loan. Only individuals with a good credit score are applicable, while the rest remain aloof. It can be the case with stock loans because some banks and institutions check your credit score when providing this loan facility. However, if you take a stock loan from Abhi Loans, you can unlock quick capital even if you have a bad credit score.

Besides, it does not require hefty documentation. All you need is KYC documents, which you can submit digitally. The ease of remote application makes loans against stocks a great choice to get quick funds.

4. Flexible amounts If you need a small amount to cater to your small financial needs, a loan against shares works best. Even if you require big cash, the loan works equally well. The loan amount you will get may vary from lender to lender, depending on the type and value of the securities you pledge.

But, if you borrow from Abhi Loans, you can take any amount ranging from Rs. 15,000 to Rs. 1,00,00,000. It shows that a loan against securities is suitable for everyone.

5. Save on your Capital Gain Tax and other taxes.

Whenever we sell a share, there is a capital gain that is profit generated from the sale of any qualifying investment option. If the security is owned by an investor for more than 12 months at the time of sale of an asset, it qualifies for a long-term asset (subject to indexation), less than 12

months is a short-term gain. The tax is 10% for the Long term and 15% for Short term capital gain. By not selling, the investor saves on Capital Gains besides other taxes like Shares Transaction Taxes.

If the reasons above make sense, you should look no further than a loan against securities when you need instant cash. For better deals, you may choose to borrow money from Abhi Loans. The institution stands to cater to all your financial needs with minimal documentation and easy application.