Loan against Shares Meaning

Loans against shares or securities are a great way of raising capital when one is in need of funds. These types of loans are given by banks in the form of overdraft against the shares held by the customer. The biggest benefit of this is that it enables the customers to get instant liquidity without selling their securities and when one repays the debt he or she gets back the shares from the bank thus there is no liquidation of stocks.

The valuation of this type of loan is quite tricky because of the constant change in the price of securities as the price of shares keep changing on day to day basis and therefore depending on the bank policies the percentage of loan given (ranges between 50 to 70 percent of total value) is less as compared to loan against property.

0 comments… add one

Leave a Comment


Related pages


types of monopolistic competitionpenetration pricing examplesasset vs liability definitionadvantages and disadvantages of discounted cash flowwhat are the advantages of urbanizationlaw of marginal diminishing utilityhorizontal mergerfull form of cibil in bankingtraditional economy definition economicscarriage inwards definitionadvantages and disadvantages of international marketingmerits of capitalismmeaning of advantage in hindiplanned economies definitionunsystematic riskshorizontal mergersjournal entry for closing stockfluctuations définitionaccrued income exampleswhat is normal and inferior goodsbarter system advantages and disadvantageslaw of diminishing returns economics exampleadvantages of the payback methodfeatures of privatizationpartnership profit sharing ratiowhat is a profitability ratiosubstitute and complement goodswhat are the disadvantages of commodity moneycommand economy advantagesb2b disadvantagesexamples of planned economy countriescurrency convertibilityexamples of capital receiptscapitalism merits and demeritsinferior goods and normal goodsdefine inferior goodsadvantages of monopoliesfull form of tds in bankingmsf full formwhat is the difference between implicit and explicit costesop full formwholesale lending definitionprestige pricing definitionadvantages and disadvantages of bank accountsdurable and nondurable goods exampleshow to calculate creditors turnover ratiodifference between freight and carriagebrs rulescash discount journal entryshareholding definitioninvestment appraisal methods advantages and disadvantagesvertical analysis of financial statementdisadvantage of command economymarket skimming examplewhat does accrued income meantraditional economy definition and exampleswhat is penetration pricing strategyslr full formtypes of conglomerate mergersbenefits of swot analysiswhat is conglomerate in economicsconsignees meaningdefine marginal costingcost plusignificance of foreign exchange reservesautocratic leadership stylesorganizational structure advantages and disadvantagesdifference between cash credit and overdraftfeatures of sole proprietorshipdistinguish between monopoly and perfect competitionnondurable goods listwhat is mixed economy in economicswhy trial balance is preparedhow to prepare fund flow statement from balance sheetwhat are the advantages and disadvantages of brandingaccounting entry for prepaid insurance