Can I get a home loan without being employed but have investments in Crores?
Which NBFC take shares as collateral and offer me the best interest rate?
I understand we’re in a potential bull market, but somehow I feel real estate investment would be a good hedge in the medium term.
Potential bull market is your opinion and not the Bank.
The bank just sees you as no income, high risk unless you flash out some collateral.
Clearly you didn’t understand my question, anyway thanks for the reply
Nothing is certain in market. The bull market is your theory. The bank will not buy it.
Almost all banks offer Loan Against Securities in lieu of shares but that’s very risky. Because the maximum amount that they can offer is only upto 50% of current value of shares as per RBI norms… If the stock price falls, you’ll have to either provide additional collateral or pay the balance. If you fail, they’ll liquidate your shares in the open market.
Two factors apart from the many, which you need to prove to the bank is
Basically you need to prove to the bank your ability to service these two elements. Apart from this Bank would want security like property or shares of liquid companies. Each bank will have their Loan to value ratio and you need to abide by them.
The issue is if you do not have cashflows then banks will be constrained to lend. Banks are not interested in selling the security.
If you have a property as an example which is generating income and you could talk to the bank to assign this so that this could be a source of repayment for the bank. Do remember irrespective of the value of the security that the bank holds, it needs you to service the interest and principal portion, if not, your loan will be marked and bank might need to make provisions. This is not good for banks and hence they insist on cashflows.
What you could also explore is NBFCs who are willing to give you a loan on bullet repayment basis. That is you will pay only the interest portion and principal will be paid on the maturity of the loan. There is an option like this but not sure if it is available for retail investors. Even here you should show the ability to repay the full amount on the maturity date.
Since you have investments in crores and I presume it is shares and your intention is to buy house and presuming it is for rental purpose, you could sell a portion of your investments and increase your down payment and hope banks will agree for a loan. You could also give them the option of pledging additional shares than what is required so that they can sell this portion of shares and use it as repayment. Quite cumbersome not sure if they will agree for these arrangements for retail home loan.
Prepare a networth statement with all your investment and cashflows and present it to a bank or NBFC and I am sure they will structure a product for you. Banks need business and hence will always oblige if you have the money to pay.
Disclaimer: These are my personal thought and I am not a qualified advisor. These are only for your information .
In case you have FD’s, then Bank will grant you an Overdraft against this as FD is the most liquid form of security. You could use it for your purpose and repay it as and when you get cash. Not an ideal product as an Overdraft is for short term requirement and not for term loan for housing purposes. But just a thought for you to consider.
Trading income can’t be presented as cashflows. Even if I show a consistent profit?
I will be liquidating my FDs and all other instruments except liquid funds (50% cash collateral required by Sebi for overnight positions). Have made many complex investments during the last 1 year, now on a spree to simplify.
If the haircut is 50% for pledged securities, it would be a disastrous decision. Now back to basics, how can I secure a home loan?
Will opening a LLC helps?
It wont. Whether it is an individual or a LLC or Partnership, all, need to prove the ability to service the loan. If yes, you will get the loan, if not quite a challenge.
So it’s evident that trading income is NOT an ability to service the loan in the eyes of NBFCs/Banks?
It can be if you show your ITR to banks. It will reflect as business income in ITR. May be not all but some banks/nbfc will consider it.
Many have gone lengths to provide an answer.
The answer is no. Bank is not a broker.
Won’t accept any shares as collateral. It’s not in the papers.
Shares is not gold 
or property. It doesn’t stand as collateral. All other inputs are theory.
I have a banker in the house who works in loan section.
You can have loan against share with 50% of haircut. No reqiurement of cibil score. Interest upto 11% on regular banks. You should have demat with them.
Bank has brokerage firm
ICICI BANK has icici securities
SBI has sbi securities
Almost popular banks have brokerage firm.
If you would have time then you should search one of your fav bank and write securites ahead of it you might found one. Also search ‘bank name’ loan against share.
Zerodha Capital provides @10.5% with a 55% haircut on pledged securities.
I’m finding it better than the rest, apart from high IR, any other Cons I should be aware of?
Came across this today, (value research email) although they grant loan against mutual fund, you could check with them if they give loan by pledging individual shares.
This is only for information.
I know this a very old post but today i got a message from icici direct that tata capital is offering loans against pledge of shares. This is not the margin thing which brokers give but personal loan against pledge of shares. If you are still looking out for this you can check their website.
When i saw this message, remembered your post. They say from 75k to 5 c
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