Advances against stock exchange securities are a convenient way to access funds by using your market investments as collateral. This financial product allows individuals and businesses to retain ownership of their securities while meeting their short-term liquidity needs. By pledging securities such as shares, bonds, or mutual funds, borrowers can secure a loan and continue benefiting from market growth without having to sell their assets.
What are advances against stock exchange securities?
Advances against stock exchange securities involve obtaining a loan by using your existing stock market investments as collateral. Instead of selling shares or bonds, you can use them as security for borrowing a percentage of their current market value. This option is ideal for those looking to meet financial needs without liquidating long-term investments.
Eligibility criteria for obtaining advances
Eligibility for advances against stock exchange securities typically includes:
- The borrower must be an individual or business entity with a demat account.
- The borrower must possess eligible securities such as shares, mutual funds, or bonds.
- Income proof and creditworthiness may be evaluated by the lender before approval.
Documentation required
| Document type | Required documents |
| Personal identification | PAN Card, Aadhaar, or Passport, PAN, Passport, Driving License, Voter ID, Aadhaar, Job Card issued by NREGA, Letter issued by the National Population Register |
| Income proof | Salary slips, bank statements, or income tax returns |
| Securities proof | Demat account details and latest statement |
| Other documents | Duly filled application form and recent passport-size photographs |
In case OVD does not have Current Address of the client, obtain below listed documents which are treated as Deemed to be Officially Valid Documents (DOVD)
- Utility bill, in the name of the client, which is not more than two months old
- Property or Municipal tax receipt
- Pension or Family Pension Payment Orders (PPOs)
- Letter of Allotment of Accommodation from Employer issued by State Government or Central Government Departments, Statutory or Regulatory Bodies, Public Sector Undertakings, Scheduled Commercial Banks, Financial Institutions and Listed Companies, and Leave & License Agreements with such employers allotting official accommodation
In case a client submits Deemed to be OVD (DOVD) towards Current Address, client must submit an OVD mentioned in (A)(3), updated with Current Address, within three months of submission of the DOVD.
Benefits of advances against stock exchange securities
Taking out advances against stock exchange securities offers several advantages, making it a popular choice among investors who wish to maintain their market positions.
Quick access to funds
- Provides quick liquidity for urgent financial requirements.
- Simple process with minimal documentation depending on the institution.
Competitive interest rates
- Generally lower interest rates compared to unsecured loans.
- Interest is charged only on the amount used, not the entire sanctioned loan.
How to apply for advances against stock exchange securities?
Applying for advances against stock exchange securities is simple through Bajaj Finserv-
Step 1: Visit page and Click on 'Apply'.
Step 2:Enter your personal details such as name, PAN, DOB, etc.
Step 3:Provide your email address and verify it.
Step 4:Add the scrips against which you wish to avail a loan.
Step 5:We will evaluate your portfolio and generate a personalised loan offer.
Step 6:Complete the KYC verification process for generating the sanction letter.
Step 7:Register the E-mandate to set up automatic repayment of your EMIs.
Step 8:Accept the agreement and provide your consent for loan sanction and disbursement.
Step 9:Pledge your shares to determine the final loan amount.
Step 10:Upon verification, the loan amount will be credited to your bank account.
Conclusion
Advances against stock exchange securities provide a flexible way to access funds while retaining ownership of your market investments. With competitive interest rates and quick access to liquidity, this financial option is ideal for individuals and businesses seeking short-term financial solutions without selling their securities.
