Should You Foreclose Your Loan Against Securities Account with Mirae Asset Financial Services if You Don’t Need the Funds Anymore?

Introduction

A Loan Against Securities (LAS) from Mirae Asset Financial Services provides a convenient and flexible way to access funds while keeping your investments intact. Functioning as an overdraft facility, this loan structure allows you to borrow money as needed, offering flexibility in managing financial needs. But what exactly is an overdraft facility? Simply put, an overdraft facility gives you the freedom to withdraw funds up to a predetermined limit, while interest is charged only on the amount you use for the duration you use it. This unique structure makes LAS an attractive option for meeting planned and unplanned expenses.

Interest and Charges: Flexible and Transparent

With LAS, you only pay interest on the amount you utilize and for the number of days you use it. For example, if you borrow ₹1,00,000 for 15 days, you are charged interest only on that amount for those 15 days. Additionally, the loan creation charges are applied only at the time of loan setup, and there are no maintenance charges throughout the tenure unless you actively use the facility. This makes LAS a cost-effective way to access funds without unnecessary financial burden.

Uses of Loan Against Securities

Loan Against Securities can be used to meet a variety of financial needs without selling your investments. Common uses include:

• Wedding Expenses: Finance large-scale celebrations without liquidating your portfolio.
• Home Renovation: Upgrade or repair your home conveniently.
• Emergencies: Address urgent needs like medical expenses promptly.
• Traveling: Fulfill your wanderlust with ease.
• Business Expenses: Manage working capital or seize new opportunities.

The versatility of Loan Against Securities ensures that you have the financial backing for almost any situation while maintaining the growth potential of your investments.

What to Do If You Don’t Need the Funds Anymore

If you find yourself in a position where you no longer require the funds, you can easily repay the utilized loan amount without incurring any prepayment charges. Even after repayment, your loan account can remain active without any maintenance charges for the duration of the loan tenure. This means your Loan Against Securities account will still have a credit limit available for any unforeseen emergencies.

Additionally, if you wish to sell some of your pledged securities, you can make a partial withdrawal of securities for a nominal fee of ₹500 plus applicable taxes. This allows you to regain access to certain securities while keeping your LAS account active for future use.

Conclusion:

Foreclosing your Loan Against Securities account is not always necessary, especially if you foresee the possibility of needing funds in the future. Unless you plan to redeem or sell all your pledged securities, keeping your LAS account active can be a prudent financial choice. With no maintenance charges during the loan tenure, your active LAS account serves as a safety net for any unexpected financial needs. So, enjoy the peace of mind that comes with a flexible financial backup while your investments continue to grow.