Manage Your Repayment For Loan Against Securities (LAS)
When it comes to Loan Against Securities (LAS), securing the funds you need is just the beginning of the financial journey. Equally important is the repayment phase, where you’ll need a well-thought-out strategy to ensure the smooth return of the loan against securities payment. A loan against securities repayment is where you set the stage for a financially sound future, and in this blog, we’ll explore the ins and outs of this crucial aspect, helping you navigate the loan repayment process with confidence and ease.
Loan Against Securities Repayment
Repaying your Loan Against Securities (LAS) may induce financial strain if not meticulously managed. However, if you’re considering availing a Loan Against Mutual Funds (LAMF), which is a subset of LAS, you might find the repayment process less worrisome. At smallcase, we offer LAMF, where you only need to pay monthly interest on the borrowed amount. Additionally, you can choose when to repay the principal. This flexibility can make managing your LAMF a smoother and stress-free experience.
Manage Your Loan Against Securities Payment
Manage your missed payments and clear part-payments of LAS easily.
Missed Interest & Part-Payments
If you happen to miss an installment of your loan repayment on the due date, there’s an option to select the missed loan against securities interest rate payment. However, if you find yourself with extra funds, certain lenders provide a pre-payment facility, allowing you to make partial loan payments. This can be used to settle your loan ahead of schedule and retrieve your pledged loan against securities. However, in smallcase the pre-part payment charges are Rs. 0.
Foreclosure
Foreclosure can have a devastating impact on a borrower’s finances and credit score. A foreclosure refers to paying the whole outstanding amount before the due date. As a result, your loan gets closed before time. As easy as it may sound, it can be better to only foreclose the loan amount once you have additional funds. However, at smallcase there are zero foreclosure charges.
How to Repay Loan Against Securities?
You can repay a loan against stocks or securities by making regular interest payments and, when feasible, choosing to pay off the principal amount. The loan against mutual funds repayment process typically offers flexibility, enabling you to maintain ownership of your pledged securities while gradually settling your loan. iIn smallcase repaying LAMF is fairly easy, here’s how:
- Visit the loan servicing dashboard
- Click on the ‘Repay cash’ button
- Enter the amount you want to repay.
Note: Remember, you can make the repayments at any time before the end of your loan tenure.
However, one might wonder about the partial unpledging of mutual funds. Unlike some lenders, this might not be possible on smallcase right now. Thus, it may be better to repay all dues and close the loans to unpledge all the mutual funds in one go. We plan to provide partial unpledging of mutual funds soon.
Loan Disbursal
Disbursement means paying out money from a fund. The loan disbursal process for a LAS in banking or NBFCs typically involves a few key steps.
Once you’ve applied for a LAS and met the lender’s eligibility requirements, they may establish an overdraft account for you. At smallcase, the entire process from application to disbursement for LAMF is usually completed in 2 hours. Isn’t it amazing?
For better understanding, let’s take an example.
For instance, if you’ve opted for LAMF through smallcase and have chosen to disburse the loan amount, it will be credited to your bank account within two hours upon completing the application process.
Closing Loan
You can request for a loan against mutual funds closure from the help section of your ‘Loan Dashboard’ on smallcase or by reaching out to the support team. If there is no outstanding amount, your pledged mutual funds will be released and your loan account will be closed as soon as possible without any foreclosure or hidden charges.
Ease Your Journey By Following Loan Against Securities Payment Tips
Here are some useful tips for repayment of loan against securities that you might want to consider. Some of them have been listed below:
- Make timely payments: It may be beneficial to establish a budget and auto-payments to ensure timely payments.
- Choose a repayment tenure that you can afford: When talking about LAS repayment, it is important to choose a loan repayment tenure that can be comfortable for you and your budget.
- Keep your collateral value in check: In LAS, the lender may have the right to liquidate your collateral if you default on the loan. To avoid this, make sure that the value of your collateral is potentially higher than the outstanding loan amount.
- Consider prepaying the loan: If you have the extra money, consider prepaying your LAS. This can save you money on interest and reduce the overall cost of the loan.
To Wrap it Up…
In conclusion, repaying a loan on securities can be a crucial phase in your financial journey that demands careful planning and execution. It’s not just about repaying the borrowed amount but also about safeguarding your valuable investments. Whether you’re availing LAS or its subset, such as Loan Against Mutual Funds (LAMF) via smallcase, understanding loan repayment options and timelines can be paramount.
As always, investors must do their own research and/or consult their financial advisor before making any financial decision.
Frequently Asked Questions About LAS Repayment
Loan Against Securities (LAS) is a secured loan that you can avail against your pledged securities as collateral. It is a versatile loan that can be used for various purposes, such as meeting financial emergencies, expanding your business, or investing in new opportunities.
To repay your loan against security, you have the option of paying monthly installments that cover both interest and principal amounts. You can also make lump-sum payments to reduce the outstanding loan amount. LAS repayment option often offers adaptable options, allowing you to select the most suitable plan for your financial circumstances.
Yes, you can pledge your shares and take a loan against securities. When you pledge your shares as collateral, you can secure a loan from a financial institution or lender. The value of the loan is typically determined based on the market value of the pledged securities.
While a single late payment will have a minimal or low impact on your CIBIL score, multiple late payments will adversely affect your score. However, one can clear their dues on/before the due date.
While a single late payment will have a minimal or low impact on your CIBIL score, multiple late payments may adversely affect your score. However, one can clear their dues on/before the due date.
Borrowers can pledge their stock investments as collateral while availing a loan against shares. This is considered a convenient way to secure funds without liquidating your investments.
All About Loan Against Securities & Loan Against Mutual Funds on smallcase –
smallcase offers quick and easy disbursement of loans against securities ( LAMF), all about eligibility, documents, features and benefits of Loan against mutual funds and the process for applying for loan is just one click away –
