Secured loans allow borrowers to leverage existing investments without liquidating them, ensuring continued financial growth while addressing urgent fund requirements. Since the lender holds these investments as collateral, interest rates are significantly lower than unsecured loans, making them a cost-effective option.
This guide explores six effective ways to secure a Rs. 20 lakh loan, eligibility criteria, required documents, the application process, benefits, and EMI calculations. Understanding these aspects will help borrowers make informed financial decisions and select the most suitable loan type based on their needs.
6 ways to get Rs. 20 lakh loans
The table below outlines six secured loan options, their interest rates, and repayment terms. These options provide lower interest rates than personal loans and allow borrowers to use their financial assets as collateral.Loan product | Interest rate | Loan tenure | Details and application link |
ESOP Financing | up to 15% p.a. | Up to 36 months | Learn more and apply for ESOP Financing |
Loan Against Bonds | Up to20% per annum | Up to 36 months | Learn more and apply for Loan Against Bonds |
Loan Against Insurance Policy | Up to 24% p.a.(In case of lock-in policies, compounding interest will be chargedIn case of lock-in free policies, simple interest will be charged) | Up to 96 months | Learn more and apply for Loan Against Insurance Policy |
Loan Against Mutual Funds | 8-15% per annum | Up to 36 months | Learn more and apply for Loan Against Mutual Funds |
Loan Against Shares | 8-15% per annum | Up to 36 months | Learn more and apply for Loan Against Shares |
Each of these loans provides access to quick funding with minimal paperwork. Borrowers can continue earning returns on their investments while using them as collateral for securing a loan.
Eligibility criteria for a Rs. 20 lakh loan
Meeting the lender’s eligibility criteria is crucial for a successful loan application. Though specific requirements may vary, here are some common eligibility factors:- Age: 18 to 65 years
- Income: Stable income source from salary, business, or investments
- Employment status: Salaried or self-employed professionals/business owners
- Asset ownership: Existing investments in bonds, shares, or insurance
Documents required for Rs. 20 lakh loan
To ensure quick approval and disbursal, applicants must provide valid documentation. Lenders require identity, income, and investment proof to process the loan application.Official Valid Documents (OVDs) for KYC:
- Identity proof: Aadhaar, PAN, passport, driving license or Voter ID
- Address proof: Utility bills, passport, driving license, or Aadhaar card
- Income proof: Salary slips, IT returns, or business financial statements
- Bank statements: Last six months’ statements
- Investment proof: Ownership documents for shares, bonds, mutual funds, or insurance policies
- Loan application form: Completed and signed form as per lender’s requirement
How to apply for a Rs. 20 lakh loan?
Applying for a Rs. 20 lakh loan is a simple process that can be completed online or offline. Here’s a step-by-step guide:- Choose a suitable loan type – Compare ESOP financing, loans against bonds, or shares to find the right option.
- Check eligibility criteria – Ensure you meet the lender’s requirements, including credit score and asset ownership.
- Gather necessary documents – Keep ID proof, income proof, and investment details ready for faster processing.
- Apply online or offline – Visit the lender’s website or branch to submit your loan application.
- Get loan approval – The lender will verify documents, check credit history, and approve the loan if all conditions are met.
- Disbursement – Once approved, funds are transferred to your bank account within a few days.
Benefits of Rs. 20 lakh loans against investments
Choosing a Rs. 20 lakh loan against investments offers multiple advantages over unsecured loans:- Lower interest rates: Secured loans have significantly lower interest rates than personal loans.
- Quick approval and disbursal: Minimal documentation and fast processing ensure funds are available within days.
- No need to sell investments: Borrowers can use their shares, or bonds as collateral while continuing to earn returns.
- Flexible repayment tenure: Loan terms range from 12 to 60 months, allowing manageable EMIs.
- Higher loan amount eligibility: Loan amounts depend on the value of the pledged assets, enabling access to higher funding.
- Loan to Value (LTV): Lenders offer 50% to 90% of the investment’s value as a loan, ensuring substantial borrowing capacity depending on the lender itself.
Conclusion
A Rs. 20 lakh loan against investments is a smart way to access funds without liquidating assets. Secured loans offer lower interest rates, flexible repayment options, and quick approvals, making them ideal for borrowers needing immediate liquidity.Before applying, compare loan options, interest rates, and repayment terms to choose the best solution for your financial needs. Proper financial planning ensures smooth repayment and effective use of the borrowed amount.
Explore Loan Against securities by Bajaj Finance Limited.