HDFC Bank<\/a><\/li>\n<\/ul>\nBottom line:<\/strong> Even if a PL looks cheaper on paper, using it to buy shares may violate your loan agreement<\/strong>. When in doubt, read your bank\u2019s T&Cs and seek independent advice.<\/p>\nApple-to-apple: Cost comparison<\/strong><\/h2>\nAt Paytm Money, MTF funding begins at 7.99% p.a. (for funding up to \u20b91 lakh). For funding between \u20b91 lakh and \u20b91 crore, the applicable interest rate is 9.99% p.a., while funding above \u20b91 crore is charged at 8.99% p.a.<\/p>\n
In this section, we compare the cost of using a Margin Trading Facility (MTF) with a standard Personal Loan (PL).<\/p>\n
To illustrate, we assume a funding requirement of \u20b92,00,000.<\/p>\n
\n- MTF case: Paytm Money’s applicable interest rate of 9.99% p.a. (\u20b91 lakh\u2013\u20b91 crore slab). Interest is charged only for the period the funding is used. There are no EMIs, and repayment happens when you square off your position or top up the required amount.<\/li>\n
- PL case: Personal loan at 12% p.a., with a 2% processing fee + 18% GST, and a 3% foreclosure charge + applicable GST if the loan is closed before the lender’s prescribed minimum tenure. Actual charges may vary across lenders.<\/li>\n<\/ul>\n
These examples are purely illustrative and intended to show how borrowing costs behave over different holding periods. Actual costs depend on the applicable interest rate, funding amount, tenure, and lender or broker charges.<\/p>\n
Scenario Table \u2013 \u20b92,00,000 Funding<\/h3>\n
<\/p>\n
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\n\n\n| Holding Period<\/th>\n | MTF Interest @ 9.99% p.a.<\/th>\n | Personal Loan (12% p.a.) incl. fees*<\/th>\n<\/tr>\n<\/thead>\n |
\n\n| 30 days<\/td>\n | \u20b91,642<\/td>\n | Not practical: PLs typically have 12\u201360 month tenures. Even if prepaid, total cost generally includes processing fee, accrued interest and foreclosure charges, making the overall cost significantly higher.<\/td>\n<\/tr>\n |
\n| 90 days<\/td>\n | \u20b94,926<\/td>\n | ~\u20b915,634 if prepaid after 3 months (processing fee + foreclosure charges + GST + ~3 months’ interest).<\/td>\n<\/tr>\n |
\n| 180 days<\/td>\n | \u20b99,852<\/td>\n | ~\u20b917,968 if prepaid after 6 months (based on the same assumptions).<\/td>\n<\/tr>\n |
\n| 365 days<\/td>\n | \u20b919,980<\/td>\n | ~\u20b917,957 (assuming the loan is held for the full 12-month tenure, including EMI interest and processing fee).<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n <\/p>\n \u2190 Swipe horizontally to view full table \u2192<\/div>\n |