Different Kind of Loans In India against securities

POSTED BY Jagoinvestor ON December 26, 2011 COMMENTS (96)

What are the different types of loans you can take in India ? Do you always think about Personal loan when you want a loan? A lot of people despite having different kind of assets go for personal loan even if they have other options where they can mortgage an existing asset and take a loan at lower interest rate. In this article I will give you 5 alternatives to personal loans and tell you a little bit about each.

Personal Loan

Before we move forward let us understand a basic rule of lending. There are two kind of loans , Secured Loan and Unsecured Loan. Secured loan is a loan where a lender has access to some kind of asset so that incase you run away, he can liquidate the asset and take his full or partial money back, as there is a sense of security in secured loans, you have to pay a lower rate of interest on these loans. However an Unsecured loan is a loan where the lender has no access to any asset and incase you run away, bank has no way to get back that loan , that’s the reason you have to pay very high interest rates on these loans, Personal loan and credit card are examples of these loans. The biggest reason why someone should go for these alternative loans is that the processing of these loans are much faster and better interest rates compared to a personal loan. So now lets see some alternatives to personal loan incase you posses an asset.

1. Loan against Gold

Lets me start with the best option to take a secured loan in India. You can pledge your Gold jewellery and take a loan from Banks and companies like Muthoot Finance or Mannapuram Gold. The best thing about gold loan is that the processing is extremely fast (from few hours to 2-3 days) depending on your case. The way it works in Gold loan is like this – The higher the margin of safety you leave , the lower the interest rate. Here is an example , if you have gold worth Rs 10 lacs and you are ready to pledge it for a loan of just 5 lacs, then you are leaving a comfortable margin of Rs 5 lacs for Bank (incase you run away or gold prices decline) . So in this case you will get a very good interest rate offer , but if you take a loan which is 80% or 90% of the worth , then you will be asked for a very high interest rate. Generally the interest rate asked is between 12% – 15% .

There are no pre-processing charges or too much documentation involved in gold loan, in most of the cases the only thing required is your address and id proof. that’s all and you can get a loan within 24 hours easily .

2. Loan against your Insurance Policies (LIC/SBI)

Lets talk about LIC policies here. You can also get a loan on your LIC policy incase its eligible for loan (most of them are) . But to get loan on your LIC policy, it should have a SURRENDER VALUE, which happens only after payment of 3 yearly premiums. Only after that you can avail for a loan which would be around 90% of Surrender Value. Lets see an example – Ajay has a LIC endowment policy which has a yearly premium of Rs 50,000 . He has paid 10 years premium (total 5 lac) , the surrender value of his LIC policy is around 3 lacs at the moment. So he can get a loan of around 2.7 lacs.

One can take a loan either from LIC itself (recommended) or from banks, for which they will have to pledge their LIC policy totally to them. So incase they are not able to pay the loan, their LIC policy will be surrendered and company will take their money back. The best part of these loans is that you get it only at an interest rate of 9-10%. So if you have a LIC policy and it has a respectable Surrender Value , then you can take Loan against these policies and not take personal loan which has hefty interest rates. Check the loan amount available on your LIC policy by just sending this SMSASKLIC YOUR-POLICY-NUMBER LOAN to 56677

3. Loan against Fixed deposits

Incase you have a Fixed Deposit for long-term and would not like to break it in times of emergency, you always have an option to take a loan against that Fixed Deposit. The interest rate you will have to pay on that loan should be 1-2% higher than the interest rate earned on the FD and the loan amount available to you would be around 75% – 80% of the FD current Worth. For an example – suppose you have a FD which has its current worth at 10 lacs and you are earning 10% on that FD , then you can get around 8 lacs of loan at 12% interest rate . This is one good option incase you do not want to break the FD and also want to take a loan.

4. Loan against Property

You can also take loan against your property (Residential and Commercial) . Banks give loan upto 50% of market value of the property or 30-40 times your monthly income . The interest rate charges is in range of 13-16% depending on how big the loan is and how much margin you can leave. Loan against property is generally recommended for those who want a big amount as loan for purposes like expansion of business, wedding or some big-ticket expenses. Incase you need just 2-3 lacs of loan then it’s not recommended.

There can be processing and prepayment charges in these loan against properties (LAP) . A good place to compare the loans against property is policybazaar page . Public sectors banks like Bank of Baroda, SBI banks are known to not charge the prepayment penalties and have lower processing charges . All the loans against property comes at FIXED interest rates.

5. Loan against Other investments

Shares and Mutual Funds – There are loans offered against Mutual Funds and Shares , but there is a list of approved Funds and Shares which can get loan, also as the values of shares and mutual funds are highly volatile, there is high level of margin required on it , Means that if you have shares worth Rs 10 lacs , the amount of loan you can get is much lower than 10 lacs.

Public Provident Fund – You can get loan on your PPF account also , but there are some restrictions , you can only get loan from the 3rd year to the 6th year and the amount of loan will be only 25% of the balance in the account 2 yrs back . For example – If you want to take the loan in 5th year after opening your PPF account , then you will only get loan of 25% of the balance in 3rd year , if the balance was just Rs 2,00,00 in 3rd year, then you can only take loan of Rs 50,000 .

So I hope you have got a clear understanding of what options do you have incase you want to take loan against your assets. Note that the lower interest rates are one of the reasons why you should go for these alternative loans, but the bigger reason can be fast processing of these loans in case of emergencies.

96 replies on this article “Different Kind of Loans In India against securities”

  1. Pisev says:

    Different types of loans are available in India against different types of securities. Before choosing which loan to utilize and where to get it, it’s critical to comprehend the various loan types that are available and what they can be used for. To get the best guidance for your unique situation, always visit a financial counselor. You can achieve well in life with the help of The Early Salary’s best loan and other services on its Personal loan app.

  2. BHAGYA says:

    I want to know if there is any loan in india similar to Jumbo loan in USA.

  3. RINKI says:

    Hello Manish ji

    Real nice article and very clear.
    Needed one clarification

    we are getting calls from HDFC for 0% personal loan for which we have to take a policy and surrender the value.

    The payment will have to be made in 10 years.

    Initially we have to pay the pay the first instalment (I.e 10 percent) at the time on taking loan, with which the policy will be created.
    After one month the loan amount would be given

    The payment would be broken equally in 10 years (monthly/quarterly/half yearly/annually)but if desired can be cleared after 5 years.
    Amd there is rebate under 80C for tax.

    For example if I take loan for 5 lakh
    I would have to pay 50,000 at the time of documentation. Then the policy document would be made and then after 25 days the loan amount of 5 lakh qould be given. I have to pay back the 4.5 lakh in 9 years (monthly/quarterly/half yearly/annually)
    And can also pay back the remaining amiunt after 5 years.
    While understanding that I will have to surrender the policy in favor of bank, my queries are:

    1. what can be the hidden catch?
    2. Is it safe to go for it?
    3. What all factors do I need to find out?
    4. How can I be cautious for not getting trapped?
    5. I am a government employee so every year I have to give declaration about my assets , loan, policy etc. … so where will i have to declare this? under policy or loan? If under policy , how will I justify my asset diposal later if I dont show it under loan? So can I show it under both the category?

    5. Any other advice u would like to sharw on such kind of scheme?


    1. Sound like a scam !

  4. Nagendra says:


    I want take a loan for my business requirements. My father has a land in my home town on his name. This land has a good market value between 4 to 6 crore’s however we are not immediately ready to sell . I need 50 lacks to 70 lacs loan. I work for an MNC in Hyderabad and my annual income is 10 lacs. As the land is on my father’s name how can I apply for a loan for the said requirement.

    1. I dont think you can get a loan because the land is not on your name. But your father can get it !

  5. Vrishali says:

    I need a urgent loan to invest in a healthy business.. ITs of 2.3 lacs which can be repayed in a yr or 2 for sure. Can u suggest me best option with less hassle? I don’t have FD to liquidate. I have some gold, i need to check in the value and LIC as well. Any other option that you would suggest ??

    1. Only options without much hassle would be a personal loan or selling off your gold

  6. Harpreet says:

    Dear Mr. Manish,

    I have a query, incase of loan against FD, will the FD continue to gain interest. I am confused. It will be great if you can explain with example..

    1. Yes, it will continue to gain interest

  7. sashi says:

    Sir please can you suggest me where I can get loan for agriculture land for my business purpose…..

    1. Hi Shashi

      THere are some loans available in this area . But I am not sure what exactly your business is . Kindly look at


      1. sashi says:

        Ton of thanks.. I didn’t expected such a quick reply from you.. You are doing awesome job. Great….

  8. Amita says:

    Hi.. Nice article..
    Wanted to not.. what happens, If I take loan on FDs and they get matured before paying of the loan?
    Do I get the FD amount and can I Use it to pay the loan?

    1. No it does not work that way . You cant liquidate your FD like this without paying the FD , yes, you can use the FD as part payment

  9. Sudhir says:

    Hello Manish Sir,
    I want to know about Home Loan .
    We are planning to built home of land which is on my fathers name .
    My monthly salary is 27k and needs near about 10 to 12 lacks loan.
    Could you suggest how i get the same .
    And one more I have gold near about 5lacs how much loan did i get on this also.
    please need helpful information.

    1. You can get the home loan , considering your father is ready to give a letter saying that incase of non payment of EMI’s , there wont be any legal hassle and the son has to sign on that. But if land is not on your name, it will be tough to claim income tax exemptions

  10. Ram says:

    Hi Manish,
    I want to get overdraft against my PPF balance for my business purpose. Is it possible to get Overdraft against PPF balance?

    1. I really dont think its possibe . PPF Is not a banking product. its a post office product, banks just be a custodian of it !

  11. ravikumar says:

    Hi Manish
    Nice artilcle and very informative article . The gold loan is easiest to avail and the processing time is also very less. You may get the gold loan on the same day.to compare to all loan the gold loan easy way ..savarable.com


  12. Abhijit says:

    Thanks for this wonderful article.
    Only because of I do not have any other option I am going ahead with down payment being raised by personal loan. I am negotiating some 4-5 banks simultaneously & working on to get the best deal in terms of following….
    1) Rate of interest
    2) Pre-payment charges
    3) Processing fees

    But somehow I am getting into the feeling that there are lot of other hidden charges which I am not aware of like Insurance fees, locking period if in case if I want to pre-close etc.

    Any advice would be a great help for suggesting me the points to consider & the ways to check before concluding on the personal loan.

    As of now the best offer is from Bajaj Finance of 14.5%, no pre-closure charges after 1st EMI, and processing fees of 2%. After this it comes to Standard chartered bank where my salary account is similar offer except 11 months of lock-in for pre-closure.

    Waiting for your inputs if any……

    1. You need to ask them things in written , do not rely on the spoken words , Atleast they should give you a sample copy


  13. Aru says:

    Can any individual pledge his LIC Policy with other individuals to get a money on credit? In case of default, can the individual surrender the LIC Policy of the debtor and get his money back from LIC towards it? Pls. suggest.

    1. Obviously you can . Just that the other side has to agree with it !

  14. sudhir says:

    i am applying for loan against propety for amount of Rs 15 lacs from LIC.
    LIC is providing the following rates
    Scheme I : 10.75%
    Scheme II : 10.70% (Fixed for 3 yrs), 11.15% (Fixed for 5 yrs)
    Scheme III : 10.95%(Fixed for 10 yrs)

    which one is the best option to choose if the tenure is for
    1)10 yrs
    2)15 yrs

    1. 15 yrs would be good

  15. Abhijit says:

    Hi Manish,

    As requested by Veman December 29, 2011 at 12:08 pm above.

    Any update on whether you have made some research on keeping the Gold at home SAFE?

    Thanks in advance.

  16. athi says:

    good article. I have gone through forum as well and i could not find out the clarification which I want.
    Situation: I took a homeloan from HDFC for 15 years (180 months) with interest rate of 10.5. I paid part payment 9 lakhs and reduced the tenure to 108months.
    Query: I am eligible to get 1 lakh loan amount from my LIC policy to make an another part payment to the home loan. Is it a good idea? can I save some bucks by paying like this. Please advice.

    1. Yes why not. if you are paying less interest than the home loan, then you can do that

      1. athi says:

        Thanks Mainsh. As per my understanding, I will be reduced the EMI & Intesest amounts by paying an another part payment for 1 lakh.

        1. Not sure .. it might be the final decision by bank

  17. Abhijit says:

    No no, not insurance but was thinking of some secret places like secret cabinets of something (as it is done in olden days). Need to dig some more for the same.

    1. Abhijit

      Actually there are different products like fire resistent vaults etc in market which you can use for this purpose . Read this http://articles.economictimes.indiatimes.com/2012-07-16/news/32698593_1_bank-lockers-bank-vault-home-safes

  18. Abhijit says:

    Hi Manish, any update on the securing your gold at home? as requested by Vemen (post 11) Any plans to have an article on this subject?

    Curious to know about the same…I have no surprise if there are many more on this forum who are also curious about the same.

    1. Securing gold at home ? What do you mean ? Do you mean taking insurance for it ? IN that case there are plans from companies to cover your household items !

  19. HARJEET KAUR says:

    What can be the tenure for the mortgage loan on Gold from Muthoot Finance?

    Can we take loan for2-5 years? does Rate of Interest change?

    Harjeet Kaur

    1. Yes it can be for 2-5 yrs and the interest rates will not change .

  20. Rahul K. says:

    Hey Manish… Do u happen to any bank which can provide loan against open plots (DTCP Approved plot in Hyderabad – to be more specific)??

    I’ve tried inquiring few but they were keen on a construction on the land.

    Any suggestion would be highly appreciated. Thnx.

    1. Rahul

      No idea about it , you might want to enquire on our forum . THis is very specific question and I am not sure if some one will really know answer unless he/she has experienced this : Live From A Lounge

  21. Suhas Z says:

    Hi Manish
    This was nice post
    Request you to wite more on Loan against LIC policy
    As every body has One.


    1. Suhas

      Its already covered in this same article , why do you need a seperate one ?


  22. Anil Agrawal says:

    Under Bombay Money Lenders Act, 1946, Maharashtra Govt is supposed to decide periodically the rate of interest that can be charged by a money lender.

    Can anybody believe that government decided on 19/4/1960 that rate would be 18% for secured loan and 21% for unsecured loan. Remember that State Bank paid just 6% or thereabout on FDR in 1960s. No wonder the rate of suicides amongst farmers went on increasing.
    After 47 years, on 10/9/2007, government has woken up to revise the rates as 12% and 15% respectively.
    Don’t say that our government don’t sleep; they are in deep slumber. Remember for 47 years it just slept and slept and slept.

    1. Anil

      Thanks for that information .


  23. Manickkam says:

    Hi Manish,

    I was seriously looking for this article sometime back. And I really thought you had already written about this and I was searching in your blog for this information. Then, I got this information browsing through everywhere.

    Only good alternative seems to be “Loan against Gold” and “Loan against FD/RD” for quick and small loans and for big loans it is “Loan against Property”.


    1. Manickkam

      yea .. loan against gold is one of the fastest and most of the people have some amount of GOLD at home :). Rest of the options will depend from person to person


  24. Prashant says:

    regarding Gold Loan I had observerd that the intrest rate is flat and not reducing basis even if it from Muthoot smart gold loan, if the same amount is takens as personal loan in reducing basis it comes to cheaper then 13.5%.

    Please correct me if I’m wrong.


    1. Prashant

      Dont judge only from interest rate point of view .. a lot of times you might want fast processing with less documentation and without income proof. With gold loan its possible .


  25. dr kishan says:

    One more point I want to add is that the loan from PPF attracts an interest of 1 % (correct!! it is one percent: according to the rules of your link above) if it is returned within 36 months, and at 6% if partially returned.

    1. Kishan

      I think its 1% more than what you earn on PPF and not only 1% .


  26. Ashok says:

    Thanks Manish. I don’t understand the difference between loan and withdrawl from our own account (which anyways one and the same). I believe as per the PPF rules, we can neither preclose or withdraw our ppf acct before 15 years tenure and the only way to take amount from your own account is by taking loan from the amount available in your ppf account. Correct me if I am wrong.


    1. Ashok

      Withdrawal can be done from your account after 6 yrs .. thats taking money from your own PPF , but if you need money before 6 yrs , then you can take loan on that .. Loan and withdrawal are different


      1. Ashok says:

        Thanks for your information Manish. If the concerned SBI Bank personnel is not aware of this rule (whom denied me the loan earlier) where should I represent or approach? Could you pls suggest me? Thanks.

        1. Ashok

          They are all aware of the rule . its just a tactics to increase the number of bank accounts .. ask him to give in writing about this thing or show you this rule anywhere written and acknowledged by SBI or PPF


  27. Aditya says:

    Thanks for the reply. I think on repayment of the availed loan against Gold ETF, the units remain with you at your own original purchase price. The G-ETFs have also given almost 31% returns for the past one year, whereas I don’t think any bank is charging the interest beyond 16%-18% p.a. for Gold Loan. In that sense also one is on positive side for fulfillment of need & at the end of the day possession of precious assets too.

    1. Aditya

      thats a risk you can take , I would not fall for a loan of 16-18% for something like gold ETF personally


  28. Durga says:

    Can we withdraw PF as well for our need? I guess that would be a no credit option :)!

    1. Durga

      No , you cant withdraw from PF(EPF) like that whenever you want .. You can withdraw at the end of 5 yrs or after your job


  29. Prabuddha says:


    I have two questions;

    1. If put my house-hold gold jewellery with Banks for Loan ~ is that possible?
    2. In this case bank will not melt the gold ~ right?

    1. Prabuddha

      Yes you can put your hold jewellery with banks for loan, you will get it .. They will not melt hte gold because its only pledged . Incase you are not able to pay off the loan , then they have the right to use the gold in their own way


  30. Aditya says:

    Hi readers…

    One thing is required to be clarified that whether the units of Gold ETFs are treated as Stock or can be considered as loan against gold by the lender? Whether different categorization attract different interest rates? If so, which one is cheaper? In addition, gold prices are less volatile than that of any other stocks.

    1. Aditya

      There are banks which take even Gold ETF .. you will have to search more on this . What is the reason for not selling the units than taking loan on it ?


  31. deepak singhal says:

    your welcome Manish,

    I will suggest you to add this in your main blog (may be point no 6) so this would be available for all (who usually ignore reply or comments) 🙂

    I also missed to say that, only one withdrawal is allowed and upto 50% of deposited amount.

    You can write may be in more detail or in your wording and delete my reply 🙂


  32. deepak singhal says:

    Hi All,

    I would like to add more on above thread.
    You can get loan on your Post Office Recurring Deposit[RD] Account also , but there are some restrictions , you can only get loan only after 1 year completion of RD account. Interest rate is very simple (more than 2% on your current interst rate you are getting on RD. For example – If post office is giving interest 7.5 % , you have to pay 9.5 (simple interest)


    1. Deepak

      Thanks for the update , I was not aware of it nor did I get that info anywhere while preparing this article . Thanks


    2. Manickkam says:

      Hi Deepak,

      Just curious, Is this applicable for any RD or only for Post Office RD?


      1. Manickkam

        these points should be applicable to only PO RD


  33. yogesh says:

    Hi manish & all,

    Nice article.

    I have a query I am planning to buy d house .How should I buy? By taking loan or
    by using my own own ?Let says I have amount to buy it..

    What is the correct from investment point of view?

    Plz suggest.

    I think it shd be in mind of many peoples.

    1. Yogesh

      Incase you have your own money for buying house , its a great thing .. but there are 2 reasons why you can take some amount of loan . First is that you will get tax benefits on the amount you pay .. next is that the bank will do some ground check on the property and you can save that headache .. however you should also do it from your own side


      1. yogesh says:

        Hi manish

        how much % loan should be taken ? 50% or less than tht ?

        Does tax saved is more than the interest paid ?

        1. Sylvestor says:

          Hi Yogesh,
          If you have so much cash, I suggest you to buy 2 flats – one for residence and other for investment. Use your money to pay the down payments of these flats. Then take 2 home loans for future payments. Once you get possesion of either of these flats, you would start getting tax benefit for the home loan of the flat you moved into and interest paid towards the home loan of the second flat can be shown as negative income (loss) which can be straightaway deducted from you taxable income. So it’s a double benefit.

          1. Rani says:

            can u suggest, as we are based outside India and planning to buy 2BHK as investment in india. Please suggest shld v go for loan option or keep on paying after every 6 month (as per completion of house), which one will be a better option. As v are not going to stay, completely for investment. So ll v get tax benefit?

            1. You will get tax benefit only if there is LOAN. So from that angle you can take it, but what will you do of tax benefit, when there is no income in India ?

            2. Rani says:

              Thank u fr ur reply. Not from the point of view of saving tax, but really want to understand whether we should go with loan or not. As v r based outside India and can v trust the builder if v r not taking loan. please suggest us the best opinion, in order that v should not have any regret.. hope to hear from you a helpful suggestion.

            3. Ok , so now if you look at it from that angle .I suggest that you go for a loan, because the bank will do most of the due deligence check and you wont have to do most of them from your side.

            4. Rani says:

              Ok, thank u Manish. I will do that..

  34. Vipin says:

    Hi Manish

    This may be the wrong place to post, but I was not sure how to get this resolved. I am unable to access the articles on the blog http://finance-and-investing.blogspot.com/ For example: http://finance-and-investing.blogspot.com/2008/01/terms-and-terminologies-used-in_24.html

    It says, the blogs are visible only on invitation basis. Could you please tell me how to go about it?

    1. Vipin

      Its the same blog as jagoinvestor.com .. so you have all articles at jagoinvestor.com now ..


  35. Ashok says:

    Hi Manish,
    Good article. I tried to check with my PPF account for taking loan (I had opened my account by the year 2006) during the year 2009 but i was told by the SBI bank staff that I can avail loan only after 6 YEARS. But you had mentioned that it is possible to take loan on 3rd year. Could you please clarify? Thanks.

    1. Ashok

      Your bank staff if not clear on this .. what he is talking about is mostly withdrawal from the PPF , the loan can be taken between 3-6 yrs old .. this is the PDF from govt website .. check yourself .. the 6th year is actually for withdrawal of your own money


  36. Keerthi Mukhi says:

    Thank you Manish and God Bless You for taking time to share the information.

    It would be helpful if this article includes a table that clearly explains all types of loans. Just a small suggestion to present the information in a more vivid manner.

    Also, what is the interest on Loans against Gold? Say if I have Gold worth 10-lakhs and I am taking a Loan of 5-lakhs against the Gold then what would be the interest? Is it 4-5% or ? and how much Manappuram/Muthoot charge for the aforementioned example?

    1. Keethi

      The interest on gold loan would be around 12-15% , did you read what i had mentioned that it will actually depend on how much margin you leave for loan ?


  37. Veman says:

    @ Nagarajan Santhan : In my Personal openion , buying a TV with Loan is not a good idea.We need to understand diff between bad & good debt.
    Now a days all companies/sellers are selling @ 0% EMI’s .
    Ex: my neigbours bought a LED TV(<40 inches) for 38K. What they did is payed 10k downpayment and remaining is 2k EMI.

    1. Do you have any idea on Security of gold pledged to the finance companies ?
    2. I have one more idea like, now a days organizations that we work for give salary advance/soft loans with no interest or minimum interest.
    3. Request you write an article on Locker facilities provided by banks(is it done already ?).
    4. As Endowment policies are not the right way to protect life, switch to term plan(Important), surrender the endowment policy and use that money instead of taking loan(here i agree that it is time consuming :

    1. Veman

      1. Gold is mainly taken by banks .. thats what I know ..

      2. Yes .. loan from your own company is a good idea .. it works out the best options

      3. What exactly you want in article ?

      4. Yea , this is good idea


      1. Veman says:

        Request for an article on how to keep safe the gold ornaments that we have (Ex: locker facilities, any other method):
        Background: Most of us aware of different ways of gold investing(Gold ETF,gold ornaments, gold bars,etc..)
        But most of the current generation married people still do not consider any action to keep safe gold(ornaments/bars) what they have.May be still some of gold is with them and some with their parents and also some with their in-laws.
        And you know most(70-80%) of our parents use traditional method(somewhere secret hiding in house itself) to keep safe. Few of them not aware of locker facilities or they hesitant to keep their gold in lockers and even with us same.
        So the article can throw light on:
        1. How to organise the gold we have(Keeptracking of what are all we have as gold ,their weight,approx value(changes often)). Something like in our absence our family should know about it and also even for us when we want to sell it after very long time(10-20 yrs)..

        2. What are the different/best ways to keep them safe(locker,any other ??)
        3. Detail info about locker facilities(different bank providers,charges, do’s and dont’s when using locker facility)
        4. Any other info you want to add.

      2. Raghavendra Miarjkar says:

        3. locker..
        Request you write an article on Locker facilities provided by banks
        i request you to post article on this..
        n number of banks with n number of fee structure size..and some specific norms like stamp papers.. some private banks insist to buy insurance policies (health,life)..

        1. Raghvendra

          It will take time to collect the information on that .. for now , you can ask the question on forum : http://jagoinvestor.dev.diginnovators.site/forum/

  38. Abhinav Gulechha says:

    Hi Manish

    Thanks for the article. It is really a good read. Yes, these options should be explored first. However, the common tendency is to go for a personal loan or a credit card outstanding also. The primary reason for the same is the convenience factor- a person would like to get the loan faster, without following formalities involved in taking a secured loan. However, he/she must understand that the effort is well worth in term of lower interest rates. Also, I observe that the personal loans are much more aggressively marketed than unsecured loans.

    Thanks again, valuable read.


    1. Abhinov

      I dont think personal loan is extremelly easy to get .. its only till a person makes up his mind . the documentation and other procedures are as tedious .. Getting a secured loan with GOLD as example would be much faster


  39. Nagarajan Santhan says:

    Hi Manish

    Nice artilcle.

    When I need a cash to buy TV for my home, I did your 3rd step (Loan against FD).

    Re-payment for kind of loan is yours choice. You will pay n number of payments in a month or day 🙂

    If you have 1000 in your hand, just pay it. No fixed EMIs and No Late payment charges.

    You will get a loan against your FD and buy something. When you close this loan you will have your asset (something) and FD also 🙂

    In my point of view this is the good option …

    Nagarajan S

  40. Anil Agrawal says:

    What is the position if my sister’s son (who was an Indian citizen but has now acquaired US citizenship and is settled there for the last 35 years) gives me a loan of Rs.3.5 lacs through inward remittance for which I have proofs? I think he does not come within the defintion of “relative”. Can I show it as interest free loan?

    1. Anil

      I dont think it will be considered as a gift .. treat it as loan, but you will have to show it with some proper interst ..


      1. Anil Agrawal says:

        I am advised that it has to be interest free loan repayable, say, after ten years and/or demand. The problem would be how to repay it since it was foreign exchange remittance. RBI won’t allow it to be repatriated. Funny is the definition of relative. Who decides who is a relative and who is not? Everywhere definition differs.

        1. Anil

          This should be consulted with a domain expert like a lawyer or forex expert


  41. Ashish says:

    Thanks for this list Manish.
    Also would like to mention – that the loan against Liquid assets (FD) – should be taken if it is for a very short duration and the charges/loss is breaking FD is greater than the difference in interest. You might know better – but some people take Home loans with their FD as a guarantee. This does not make much sense as the bank takes your own money and lends it to you at higher rate.

    With the options of Sweep in and net deposits – which can be liquidated very easily and with minimal loss – an ideal option should be to break the deposit and re-create it when you get back the amount.

    Just few cents.

    Good article.

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