Frequently asked questions
A loan against bonds is a type of loan offered by banks and financial institutions, where a borrower can pledge their bonds as collateral to obtain a loan. Here are some of the features of a loan against bonds:
a. Collateral: Loan against bonds is a secured loan where bonds are used as collateral. The amount of loan depends on the value of the bonds pledged.
b. Loan amount: The loan amount is typically a percentage of the market value of the pledged bonds. For Bajaj Finance it is 95% of the market value of the bonds.
c. Repayment: The borrower can repay the loan amount in EMIs (equated monthly installments), which includes both principal and interest.
d. Prepayment: Bajaj Finance allows the borrower to prepay the loan amount before the due date at up to 4.72% of the loan amount (inclusive of applicable taxes).
You have the option to pledge a variety of approved bonds from over 40+ Asset Management Companies (AMCs) when applying for a loan against a bond with Bajaj Finance.
A loan against bonds is a type of loan that allows individuals to borrow money by pledging their bonds or securities as collateral. Here are some benefits of taking a loan against bonds:
- Lower interest rates: Since the loan is secured, lenders usually offer lower interest rates compared to unsecured loans. The interest rates are determined based on the value of the bonds, the loan amount, and other factors.
- No need to sell bonds: By pledging bonds as collateral, the borrower can get access to funds without having to sell their bonds. This can be beneficial in case the borrower is holding bonds that are expected to appreciate in value.
- Flexible repayment options: The repayment options for loan against bonds are usually flexible, allowing borrowers to choose a tenure that suits their needs.
- Interest only on utilised amount: Of the total assigned limit against your bonds, the customer has the option to withdraw only the required amount, and interest is paid only on the withdrawn amount.
- Multipurpose use: The funds obtained through a loan against bonds can be used for various purposes like funding a business, purchasing a property, financing education, medical expenses, etc.
