Taking a 50 lakh loan through loan against securities (LAS) via an NBFC can be a smart move for many individuals. It offers quick access to finance without selling your valuable financial assets. However, understanding the precise set of documents required for this process can significantly smoothen your loan application journey and improve approval chances. In this detailed guide, we will unravel exactly which documents you need when applying for a 50 lakh loan using the loan against securities scheme through NBFCs. This will help you prepare better and act confidently, ensuring a hassle-free borrowing experience.
Searching for a 50 lakh loan? A loan against securities is an excellent option for salaried professionals, business owners, and investors looking to leverage their financial holdings. It is mostly collateral-backed lending, where your shares, mutual fund units, government securities, or bonds serve as security. Before applying, it is vital to have a clear understanding of all documentation requirements to avoid last-minute stumbling blocks. Let’s explore all you need to know, so you can get your loan approved seamlessly.
Overview of loan against securities and its benefits
The loan against securities is a secured loan where you pledge listed securities as collateral to avail credit. Typically offered by non-banking financial companies (NBFCs) and banks, this option allows borrowers to raise funds without disturbing their investment portfolio. For a sizeable credit like a 50 lakh loan, LAS becomes a convenient route as the loan amount is directly linked to the market value of your securities (loan-to-value ratio).
Key benefits include:
- Quick sanction and disbursal: Since collateral is already available, NBFCs process the loan faster.
- Lower interest rates: Compared to unsecured personal loans, LAS generally has better rates.
- Flexible tenure: You can choose repayment options ranging from 12 months to up to 60 months depending on lender policies.
- Retain investment ownership: Your shares or bonds remain in your demat account, and you continue enjoying dividends or interest.
- No need to liquidate assets: Avoids disrupting your long-term investment strategy.
These advantages have made loan against securities loans popular among Indians seeking amounts like Rs. 50 lakh for business expansion, home renovation, medical emergencies or education.
Eligibility criteria for a 50 lakh loan via loan against securities
Before discussing documents, it is important to understand who qualifies for a 50 lakh loan using this scheme. NBFCs have certain eligibility parameters to protect their interests.
Main eligibility criteria include:
- Age: Borrowers should be between 18 and 55 years.
- Type of securities: Eligible securities typically include equity shares listed on recognised stock exchanges, mutual fund units, government securities, bonds and debentures.
- Financial standing: NBFCs usually check your income stability, credit score, and net worth.
- Demat account: You must hold your securities in an eligible demat account to be used as collateral.
- Loan-to-value ratio (LTV): Usually set between 50-75%, meaning if you have securities worth Rs. 1 crore, maximum loan offered could be Rs. 50-75 lakh.
Keep in mind that different NBFCs and banks may have varying policies, so cross-check eligibility conditions before applying. Meeting these standards enhances your chances of fast approval.
Essential documents required for a 50 lakh loan application
To get that 50 lakh loan sanctioned smoothly, NBFCs require a set of documents to verify your identity, income, asset ownership, and securities details. Below is a comprehensive list of must-have documents:
Identity proof
To confirm your identity and prevent fraud, submit any one of these valid ID proofs:
- Aadhaar card
- PAN card
- Passport
- Voter ID
- Driving licence
Address proof
Proof of your residence address supports identity verification. Commonly accepted address proofs include:
- Aadhaar card
- Utility bills (electricity, water, gas) not older than 3 months
- Passport
- Rental agreement or property papers
- Bank statement with address
Income proof
Since a 50 lakh loan is a substantial amount, income documents are crucial to assess repayment capability. Typical income proofs are:
- Salary slips for the last 3 months (for salaried employees)
- Bank statements for the last 6 months reflecting salary credits
- ITR (Income Tax Returns) filed for the previous 2 years (especially for self-employed/professionals)
- Profit & Loss statements and balance sheet (for business owners)
Securities proof
The entire premise of loan against securities lies in your ownership of eligible assets. Therefore, you must submit:
- Demat account statement or holding statement displaying securities you wish to pledge
- Latest statement should show real-time holdings and valuation
- Consent form authorising the NBFC to place a lien on your securities
Loan application form and photographs
- Duly filled loan application form as provided by the NBFC
- Recent passport-size photographs (typically 2-3)
Bank details proof
- Cancelled cheque leaf or bank passbook with your name and account number
- This helps NBFCs to set up ECS for loan repayment
Having these documents ready in advance will drastically speed up the loan approval process.
How to prepare and organise your documents for a successful loan application
Some handy tips to get your paperwork in order while applying for a 50 lakh loan via loan against securities include:
- Keep originals and photocopies ready: Carry both while submitting your application; NBFCs may verify originals.
- Ensure PAN card is valid and linked with Aadhaar: This helps cross-verification and prevents delays.
- Use digital statements: Download recent bank and demat account statements directly from official portals to ensure authenticity.
- Income documents must be consistent: Ensure your ITR, salary slips, and bank statements reflect uniform income details.
- Prepare signed consent forms properly: Grant permission to NBFC for lien on securities and electronic verification.
- Avoid submitting outdated documents: Always provide documents generated in the last 3-6 months unless specified otherwise.
By taking these steps, you make the application process hassle-free and boost your credibility as a borrower.
How NBFCs evaluate your loan against securities application
Once you submit your application with all necessary documents, NBFCs initiate a thorough evaluation before sanctioning the 50 lakh loan.
Key evaluation steps include:
- Verification of identity and address: Cross-checking name, photo, address with government databases.
- Income assessment: Confirming your income from salary slips, tax returns to assess repayment ability.
- Credit history check: NBFCs use credit bureaus like CIBIL to analyze your credit score and past loan history. A score above 750 generally improves chances.
- Securities valuation: Real-time market valuation of pledged securities determines the maximum loan you can avail.
- Loan-to-value validation: Ensuring your loan amount is within permissible LTV limits, e.g., 50-75% of securities value.
- Legal verification: Correct lien marking and documentation are reviewed carefully to safeguard lender interests.
A clean, complete documentation set combined with a good credit profile often leads to faster loan approval, sometimes within 3 to 7 days.
Tips for increasing chances of loan approval for 50 lakh loan
Successfully securing a large 50 lakh loan against securities requires strategic preparation. Here are some tips to strengthen your application:
- Maintain a high-value portfolio: Larger and diversified securities portfolios can fetch better loans.
- Ensure good credit health: Keep your credit score above 750 by repaying dues on time and reducing outstanding debt.
- Provide up-to-date documents: Fresh bank and demat statements aid easy verification.
- Disclose complete income details: Don’t underestimate income to avoid rejection or lower loan offers.
- Choose reputed NBFCs: Companies with experienced teams provide expert guidance through the process.
- Communicate clearly: Share all relevant information transparently with the loan officer.
These measures not only speed up approval but also may help negotiate better interest rates or longer repayments.
Conclusion
Applying for a 50 lakh loan via loan against securities through an NBFC is a smart financial move in many situations. However, the key to a smooth, swift approval lies in meticulous preparation of your documentation checklist. Ensure that you submit valid identity proofs, residence proofs, clear income verification, updated demat statements and detailed securities portfolio information. Properly organised paperwork combined with meeting NBFC eligibility norms can significantly boost your chances of securing that Rs. 50 lakh loan fast.
Remember to keep all documents recent, consistent and complete. A good credit score and a diversified security portfolio further enhance your eligibility and loan terms. Armed with this knowledge about documents needed for a 50 lakh loan against securities NBFC application, you can confidently take your borrowing decision forward.
Secure your financial needs today with clarity and confidence!
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