Know about the Finance and Investments Terms

Suppose you are in need of an urgent funding to take your business to the next level. When approached for the business loan, the bank or lending institution may ask you to pledge an asset, or contrarily, offer the funds minus any collateral or guarantee. The former   arrangement is called secured business loan while the latter is known as unsecured business loan. Let’s get into the pros and cons of the two for an in-depth understanding. 

Advantages of Secured business loan: 

• A secured business loans guarantees larger funds, depending on the pledged asset. Usually, about 75% of the asset’s value can be availed as a loan. 

• Since the risk of a default is covered by the collateral, the lenders can provide competitive interest rates. 

• The repayment schedule may stretch beyond 5 years, ensuring stress free repayments. 

• Secured loans may be the only option available for people with poor credit score. 

Disadvantages of Secured business loan: 

• In case of non-repayments, you may lose the pledged

There are so many types of loans where you can get money by keeping assets as collateral. If you have every invested in the mutual fund, stocks, bonds, insurance, IPOs, ESOPs, shares and securities, then you can get a loan against securities, by keeping these collaterals.

You can even connect your trading account with your regular bank account. You should have an overdraft facility on your current bank account, then you will be able to use your net banking facility to apply for a loan against securities.

Steps to apply for a loan against shares are:

Select the lender

First, you should select the ideal bank or financial institution where you can apply for a loan against securities at a lower rate of interest, the eligibility criteria of a loan is less and offers many additional benefits.

Submit the online application

You need to submit an official request to acquire a loan against securities by filling the application form either offline or online. You need to attach the assets portfolio