Zerodha Capital - Updates

General
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People, we have a few updates since we last spoke about Zerodha Capital. The last @Karthik spoke about this was when we’d started off operations on this in November 2020. Although we’ve only spoken about this once, we slowly started gaining traction. In 2023, we decided to start full scale operations on the NBFC side.

So, a few changes we’ve made:

1. New onboarding flow:

You can now log in to Zerodha Capital using just your mobile number and OTP — no need to use your Zerodha (Kite) login credentials.

We’ve introduced a new Zerodha Capital Client ID format as well, which starts with ZC, followed by 5 digits and a letter (e.g., ZC12345B). You can log in using either your mobile number or this new client ID — in both cases, the OTP will go to your registered mobile number.

As part of this change, if you’re pledging shares for a loan, you’ll now need to manually authorise your holdings by logging in to Kite during the process.

2. Check your credit score

You can now check your credit score instantly and for free on Zerodha Capital. This is a soft pull powered by Experian, a credit bureau.

Once you complete the check, you’ll receive a detailed report from Experian directly in your email. It’s simple, quick, and comes with no cost or impact on your score.

3. Interest rate reduced to 11%

We’ve recently reduced our LAS interest rate from 11.5% to 11%, following the RBI’s 50 bps repo rate cut. While most lenders don’t pass on such benefits quickly, we’ve acted to ensure this benefit reaches our borrowers early.

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When will Zerodha’s NBFC have a separate mobile app?

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There are currently no plans, but we’ll definitely explore possibilities. We’ll keep you posted.

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I tried creating a capital account. I think there is a problem where the capital account is showing the old address. So when I go press the “Have your KYC Details” changed button it goes to the kite signup page.

But the kite signup page shows me the current correct new address properly. So is there even a use of again updating via Aadhaar in this signup page? As the address in the kite signup page is the correct new address but the Zerodha Capital page is the old wrong one.

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Could you DM your email/client ID to me? Will have it checked.

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available for NRIs yet?

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Not currently, we’ll explore possibilities.

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Is the loan provided by Zerodha capital suitable for IPO financing? If so, could you perhaps build a separate flow for this? Where the capital doesn’t hit our bank accounts, rather directly goes towards an IPO application?

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You can’t use this loan to apply for IPOs or invest it back into the markets. This is also clearly mentioned in the loan agreement.

The idea behind a loan against securities (LAS) is to help you access funds without liquidating your investments during emergencies or urgent needs. It lets you retain your portfolio while also giving you the opportunity to build your credit history in the process.

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@nithin Is it regulatory non-compliant to provide LAS to non-individual entities. Non-Individual accounts aren’t able to avail LAS via Zerodha Capital .

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Nope, we’re allowed to give LAS to non-individual entities. The issue here is the process cannot be done online because it cannot be via Aadhaar. We’ll look into the possibilities.

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12

Is this applicable for who have availed loan earlier or for new loans?

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Applicable to all folks, current and new :slight_smile:

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Thanks :slightly_smiling_face:

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except NRIs :sob:

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Hello, can someone please guide on what happens in LAS end of 1 year - How easy it is to get it renewed , how many times we can get it renewed, how much time before we need to inform for renewal, any key points to be aware of during renewal, any possibilities to get for a longer tenure like 2 or 3 year.

TLDR : Whats the overall process for LAS renewal before 1 year ? Thank you.

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You cannot renew the loan currently, and the tenure is limited to 1 year. We’re working on extending the tenure to 3 years to new loans, which will be live in a couple of weeks.

There will be no renewal needed in between, and the tenure will directly be 3 years. Once the tenure has ended, the loan cannot be renewed. Hence, there’s no concept of renewal at all.

We’ll keep you posted once we make the change.

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Awesome update Esha. I thought +1 year renewal was allowed earlier but then glad I asked.

Please request Team to roll out 3 yr tenure as soon as possible. In need of it.

Also, I understand that the Team has recently reduced ROI to 11% but it higher from current 10% for personal Loan from most of the private banks. If there is a chance/feasibility, please request team to revisit this as well. May be 10.5% ?

Thank you so much to the Team for providing these features.

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We’re working on rolling out a slab-wise interest rate feature. Higher the disbursal amount, lower the interest rate.

Btw, regarding the interest rate, there are borrowing costs from other lenders/NBFCs involved, meaning that we also borrow from other banks and NBFCs. These are linked to repo rates, MCLR rates of banks, and to T-Bills.

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Thank you so much Esha.

Both updates are very promising for end users.

1 additional question - slab wise ROI will roll out along with 3 year feature ? and if it is going to be later, will it impact existing loans and the current 11% ROI is floating rate ? Thank you again for your responses.