Life throws unexpected financial needs your way. Whether it's a home renovation or a sudden business opportunity for which you need funds. But why drain your savings or sell your investments when there's a smarter solution?

Take Rajesh Sharma, a 42-year-old IT professional from Pune. He suddenly needed ₹10 lakhs for an urgent personal work. Instead of breaking his mutual fund portfolio worth ₹50 lakhs that he'd been building for a decade, Rajesh opted for loan against securities. He pledged his mutual funds, received ₹10 lakhs within 24 hours at a low interest rate. By the time he repaid the loan in two years, his mutual funds had appreciated enormously proving that smart borrowing doesn't mean sacrificing long-term wealth. Thus, loan against securities lets you unlock liquidity without liquidating your assets.

This guide covers everything about loan against securities from what is loan against securities to the application process through YONO SBI. Let's help you leverage your investments intelligently.

What is Loan Against Securities

A loan against securities is a type of secured loan where you pledge your financial assets as collateral to borrow money. Instead of selling your investments such as mutual funds or fixed deposits you can use them as a security and thereby avail loan.

The beauty of this loan is simple. Your investments stay intact and continue earning returns while you access the funds you need. Once you repay the loan, the pledge is released and your assets are back under your full control.

It offers quick processing, minimal documentation and lower interest rates compared to personal loans since you're utilising loans against securities.

Benefits of Loan Against Securities

Why choose a loan against securities over other borrowing options? The benefits of loan against securities are compelling.

Quick Access to Funds - Loans again securities process faster than traditional loans and with YONO SBI, you can complete the entire process from your phone within minutes.

Lower Interest Rates - Since you're pledging valuable assets, you get interest rates lower than unsecured personal loans, whether it's a loan against mutual fund or loan against fixed deposit.

No Disruption to Your Investments - When you pledge mutual funds for loan, they keep generating returns while your fixed deposits continue earning interest without interruption.

Flexible Repayment Options - Most loan against securities offer flexible tenure options, allowing you to structure repayments based on your cash flow.

SBI accepts a diverse range of securities, making it easier for you to unlock value from virtually any investment you hold.

Loan Against Mutual Funds

Your mutual fund portfolio can be your financial safety net when you need immediate liquidity. The SBI loan against mutual fund facility lets you pledge your mutual fund units while they continue to grow.

SBI evaluates your holdings and offers loans based on net asset value. You can check the eligibility through loan calculator available at YONO platforms.

Your units remain invested, so you don't miss market rallies or dividend payouts. When you pledge mutual funds for loan, you maintain your investment journey while accessing funds. The mutual fund against loan option is ideal for investors with substantial portfolios facing short-term cash needs.

Steps To Avail Loan Against Mutual Funds in YONO

• Login to YONO SBI App
• Navigate to Loans > Loan Against Mutual Fund
• Review your personal details
• Check your eligibility
• Enter loan amount and confirm the required lien amount
• Select Mutual Funds to lien
• Accept Terms & Conditions
• Access this Overdraft loan facility

Overdraft Against Fixed Deposit

Fixed deposits remain the bedrock of conservative financial planning. The loan against fixed deposit option lets you borrow against your fixed deposit without breaking them.

The benefits of loan against FD are clear. You continue earning FD interest while the loan against FD interest rate stays comparatively low, which may be just 1% above the FD rate. For example, if your FD earns 7%, you pay around 8% on the outstanding loan amount with interest charged on daily reducing balance.

You can access up to 90% of your fixed deposit value, one of the highest loan-to-value ratios available. The loan against fixed deposit maintains your savings discipline. Instead of breaking an FD prematurely, you keep your savings intact while accessing funds.

Steps To Avail OD Against FD in YONO

• Login to YONO SBI App
• Navigate to Loans > OD against FD
• Select account type and Fixed deposit
• Understand the maturity instructions and select amount of loan
• Confirm your email-id and agree to terms & conditions
• Provide OTP confirmation and avail OD

Eligibility Criteria

Wondering how to get loan against securities? The eligibility requirements are straightforward:

• You must be the sole owner of the securities you're pledging
• Securities should be free from any lien
• Minimum loan value should be of ₹5,000-25,000

For market-linked securities like mutual fund SBI considers the current market value.

Conclusion

Financial flexibility doesn't mean sacrificing your investments. The benefits of loan against securities include quick fund access, lower interest rates, continued investment growth and flexible repayment options.

Whether you choose a loan against mutual fund or loan against fixed deposit each option provides liquidity while preserving wealth.

With SBI's YONO platform, accessing these loans is easier than ever. Smart borrowing means leveraging what you have, intelligently. Your loan against securities can serve you right when you need funds the most.