Loan Against Securities

A Loan Against Securities (LAS) is a secured loan provided by banks and financial institutions where borrowers pledge their financial assets—such as shares, mutual funds, bonds, insurance policies, or fixed deposits—as collateral.

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    Types of Loan Against Securities

    Below are the main types available in India

    Loan Against Shares (Equity Loan)

    Borrowers can pledge listed company shares held in a Demat account to obtain credit.

    Loan Against Mutual Funds

    Allows individuals to pledge their mutual fund units (equity or debt) as security.

    Loan Against Fixed Deposits (FD)

    A simple and safe option where borrowers pledge their bank FDs to get funds.

    Loan Against Bonds / Debentures

    Investors can pledge corporate bonds, government securities, or debentures to get loans.

    Loan Against Life Insurance Policies

    Offered against endowment or money-back policies with surrender value.

    Loan Against Exchange-Traded Funds (ETFs)

    ETFs held in Demat accounts can be pledged for short-term financing, particularly for traders or investors seeking to leverage their portfolios.

    Why Is Loan Against Securities Important?

    Instant Liquidity Without Selling Assets

    Borrowers can access cash while retaining ownership of their investments, ensuring long-term gains continue.

    Lower Interest Rates

    As these are secured loans, interest rates are lower than unsecured personal loans, typically between 8%–12% p.a.

    Quick and Easy Processing

    Loans are processed instantly, often within 24–48 hours, especially when assets are in Demat or digital form.

    Flexible Repayment Options

    Repayment can be structured through overdraft, EMI, or bullet payment options depending on the lender.

    No Income Proof Required

    Since the loan is backed by securities, income documents are minimal or not required in many cases.

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    FAQs

    What is a Loan Against Securities?

    It is a secured loan where you pledge your financial investments (like shares, mutual funds, or bonds) to borrow money while still retaining ownership.

    • Individual investors
    • HUFs and trusts
    • Partnership firms and companies
    • HNI clients and portfolio investors

    You can typically get up to 80–90% of the security value, depending on the type of investment and lender policy.

    Interest rates usually range between 8% and 12% per annum, depending on asset type and borrower profile.

    Yes. The funds cannot be used for speculative activities like stock trading or for margin funding, but can be used for personal or business needs.