Manage cash flow mismatches with loan against securities: Experts

If you pledge market-linked instruments and their value plummets, you will have to provide additional collateral

Tata Capital recently launched loans against shares. The lender will offer loans of up to Rs 5 crore through a completely digitised process. Several other banks and non-banking financial companies (NBFCs) also offer loans against a variety of securities: Mutual funds, debentures, insurance policies, sovereign gold bonds, National Savings Certificates, and so on.

Don’t sell securities, borrow against them

These loans are easy to get. “Customers can get quick access to funds in a manner that is simple and convenient,” says Abonty Banerjee, chief digital officer, Tata Capital.

Since these are secured loans, they are less expensive than personal loans, which are unsecured.