Refinance Loan Against Securities: When & How to Do It Smartly

You’ve already taken a smart step by opting for a Loan Against Securities (LAS). But what if there’s a chance to make that loan even more affordable or flexible? That’s where refinancing comes in.

Refinancing your LAS means replacing your current loan with a new one – ideally with better terms. Whether you’re aiming for lower LAS interest rates, improved repayment flexibility, or simply a better experience, knowing when and how to refinance can make a big difference.

So here’s a clear, no-nonsense guide to help you decide if refinancing is the right next step.

Key Takeaways

• Refinancing LAS can lower your interest burden.
• Understand eligibility clearly before refinancing.
• Evaluate the cost of refinancing LAS carefully.

Why Should You Refinance Your LAS?

Refinancing can make your existing loan more affordable and flexible. Here’s why it could be a good move:

Lower LAS Interest Rates

If market rates have dropped or you’re eligible for better terms, refinancing helps reduce your interest cost. For instance, if your current LAS rate is 12.5% and you’re eligible for 10.49% p.a. now, the savings over the loan tenure can be significant.

Reducing Your Debt Faster

Switching to a lower interest rate or better structure (like interest-only EMIs) can reduce your overall loan burden. If you’re earning more now than when you first took the loan, refinancing could help you clear dues sooner.

Improving Your Cash Flow

Refinancing can free up monthly cash. Imagine replacing a ₹25,000 EMI with ₹15,000 by extending tenure or shifting to interest-only repayment – more breathing room for daily expenses or savings goals.

When is the Right Time to Refinance?

Timing matters when it comes to refinancing. These are some signs it may be worth exploring:

Changes in Market Interest Rates

If lending rates in India have gone down since your LAS began, you could qualify for a better deal. It’s good to compare your current LAS rate with what’s available now.

Improved Personal Financial Health

Has your CIBIL score improved? Is your mutual fund portfolio more stable? Better financial standing often translates to better loan terms, which means it’s a good time to revisit your LAS.

Better Terms from New Lenders

Some lenders may offer zero pre-closure charges, interest-only EMIs, or a flexible credit line model – like Quicklend does. Refinancing could help you move to a more borrower-friendly structure.

Simplified Process to Refinance LAS

Refinancing doesn’t have to be complicated – especially when done with the right lender. Here’s how to go about it.

Check Eligibility for LAS Refinancing

Most lenders look at your current mutual fund holdings, credit score, and repayment history. For example, a salaried professional with a CIBIL score above 700 and ₹5-6 lakh in mutual funds is typically eligible. 

Understanding the Cost of Refinancing LAS

Refinancing isn’t free. You may have to pay:

• Processing fees (usually ₹999 – ₹1,999)
• Pre-closure charges from your existing lender (if applicable)
• Stamp duty on new agreements (as per state laws)

Compare these costs against how much you’ll save via lower interest rates.

Conclusion

Refinancing your Loan Against Securities can be a smart financial move – whether you’re seeking lower LAS interest rates, better repayment flexibility, or simply a smoother experience.

To know more about LAS, check out this detailed article so you can make an informed decision.

This is general guidance. For personalized loan advice, speak to a financial advisor.