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Loan against securities: Punjab National Bank, IndusInd Bank offer the cheapest interest rates
The loan against securities lowers your interest burden substantially as it is a secured low-cost loan. Punjab National Bank, Yes Bank and Bank of Baroda offer interest rates between 9.25 and 9.90 percent on loan against securities of Rs 1 lakh for a 12-month tenure
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A loan against security is a loan advanced to a customer against a security. It can be a loan against insurance policy, mutual funds, National Savings Certificate and other securities. The amount varies based on the type of the security that is pledged. If you pledge your mutual fund investments, then you can get about 70-80 percent of your debt fund value as loan but for equity funds, the figure is closer to 50 percent. The benefit of taking a loan against a mutual fund or any other security is that you don’t have to sell your investments. The amount invested continues to earn returns.
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Loan against securities lowers your interest burden substantially as it is a secured low-cost loan. Here are the top banks which offer interest rates below 10.65 percent on loan against securities of Rs 1 lakh for 12 months tenure, according to Bankbazaar.com data.
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Punjab National Bank levies interest rates starting from 9.25 percent. The EMI on a Rs 1-lakh loan against securities with a 12-month tenure works out to Rs 12,944.
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IndusInd Bank charges interest starting at 9.51 percent on loan against securities. The EMI on loan against securities of Rs 1 lakh with a tenure of 12 months will be Rs 13,082.
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Yes Bank charges interest rates starting at 9.75 percent. The EMI on loan against securities of Rs 1 lakh with a 12-month tenure will be Rs 13,209.
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Bank of Baroda's rate starts at 9.9 percent on loan against securities. The EMI on loan against securities of Rs 1 lakh with a 12-month tenure will be Rs 13,289.
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Axis Bank charges an interest rate of 9.99 percent. The EMI on loan against securities of Rs 1 lakh with a 12-month tenure will be Rs 13,337.
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IDBI Bank charges interest starting at 10.1 percent on loan against securities. The EMI on loan against securities of Rs 1 lakh with a 12-month tenure will be Rs 13,395.
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HDFC Bank's charges an interest starting at 10.11 percent. The EMI on a Rs 1-lakh loan against securities with a tenure of 12 months will amount to Rs 13,401.
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ICICI Bank charges interest rate starting at 10.42 percent on a loan against securities. The EMI on loan against securities of Rs 1 lakh with a 12-month tenure will be Rs 13,566.
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At 10.65 percent, State Bank of India charges a marginally higher interest rate on loans against securities. The EMI will amount to Rs 13,689 for a loan against securities of Rs 1 lakh with a 12-month tenure.
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Data was collected from respective banks’ websites as on April 17. Banks have been listed in the ascending order of interest rates – the lender offering the lowest interest rate is placed at the top and the highest rate at the bottom. EMIs are calculated on the basis of a 12-months tenure (processing and other charges are assumed to be zero for EMI calculation).
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