What is Loan Against Securities?

Wondering how a loan against securities stacks up against a personal loan? Let’s break it down:

Lower rates, faster access, and minimal paperwork a LAS is often more cost-effective than unsecured loans. Apply now

A loan against securities (LAS) is a simple and efficient way to access funds without liquidating your investments. Here's how the process typically unfolds:

1. Security valuation: The lender first assesses the type and market value of the securities you wish to pledge—be it shares, mutual funds, bonds, or insurance policies. Only approved and liquid securities are considered.
2. Loan approval: Based on the valuation, the lender calculates the eligible loan amount using a Loan-to-Value (LTV) ratio. The final offer depends on the type of security, market risks, and your credit profile.
3. Loan disbursement: Once the terms are accepted and documents verified, your securities are pledged, and the approved loan amount is credited to your bank account—often within 24 to 48 hours.
4. Repayment: You can repay the loan as per the agreed schedule. Many LAS options offer flexible interest-only payments during the tenure, with the principal repaid at the end. Once repaid, your securities are unpledged.

Read more: loan against security stamp duty

A digital loan against securities (LAS) is a secured loan that lets you borrow funds by pledging your existing financial investments such as shares, mutual funds, entirely online. The application, pledge creation, approval, and disbursal are completed digitally, without paperwork or branch visits, while you continue to retain ownership of your investments. Here are the key features explained:

• Fully online journey: Application, KYC, pledge marking, and documentation are completed digitally.
• Quick access to funds: Faster approvals and disbursals compared to traditional loan processes.
• Lower interest rates: Since the loan is secured by securities, rates are usually lower than unsecured loans.
• Flexible usage: Funds can be used for personal or business needs (non-speculative, as per regulations).
• Ownership retained: You keep market exposure and benefits like dividends, subject to lender terms.
• Dynamic loan limits: Borrowing power depends on the loan-to-value (LTV) of pledged securities and market movements.
• Transparent management: Digital dashboards allow you to track pledged assets, interest, repayments, and margin status in real time.

Overall, a digital LAS combines speed, convenience, and cost-efficiency, making it a practical liquidity option for investors who don’t want to sell their long-term holdings.

Here’s why thousands of investors prefer lending against securities over liquidating them:

• Lower interest rates: Interest typically ranges from 8% to 12% per annum, far lower than most unsecured loans.
• Earn while you borrow: Continue to earn dividends or capital appreciation while your assets are pledged.
• Pay interest only on what you use: Works like an overdraft pay interest only on withdrawn amounts.
• Flexible repayment: Pay just the monthly interest or prepay anytime zero to minimal foreclosure charges depending on the variant.
• Minimal eligibility: Indian citizens above 21 with securities in demat format can apply.
• 24/7 account access: Track your loan account or contact customer support at your convenience.

Why sell your investments when you can borrow against them? Apply now and enjoy flexible withdrawals and lower interest rates.

Getting started with a Loan Against Securities is simpler than you may think. If you have investments and a steady income, you're likely eligible. Here's what most lenders, typically require:

• Citizenship and age: You must be an Indian citizen and at least 21 years of age at the time of application.
• Eligible securities: You should own approved financial instruments such as mutual funds, listed shares, bonds, or other marketable securities.
• Demat account: Your securities must be held in a demat account (for shares) or mutual fund folio that can be pledged electronically.
• Income proof: A regular source of income helps verify your repayment capacity and is often needed for KYC and credit checks.

Already have a mutual fund or demat account? You are halfway through the eligibility process. Check eligibility

While a Loan Against Securities is generally more affordable than unsecured credit, it’s important to know the potential charges involved. Here’s a breakdown:

• Interest rate: Typically starts from 8% to 15 % per annum and varies based on the lender, your credit profile, and the type of security pledged.
• Processing fee: A nominal one-time fee is charged for setting up the loan and completing documentation.
• Prepayment or foreclosure charges: These depend on the type of variant you opt for, it’s best to confirm in advance with your lender.
• Penalties: Charges may apply for missed EMIs, late payments, or failure to maintain required margins.

The interest rate on a LAS isn’t fixed like a personal loan it’s dynamic and depends on multiple factors. Here’s what typically influences it:

• Market conditions: Prevailing repo rates and liquidity in the financial market affect the base rate.
• Your credit profile: A high credit score and stable income improve your chances of getting a lower rate.
• Type of security: Blue-chip stocks or AAA-rated bonds can fetch you better terms compared to less liquid or high-risk assets.
• Loan amount and tenure: Larger amounts or shorter terms may influence your rate, either positively or negatively.
• Loan-to-Value ratio (LTV): A lower LTV reduces the lender’s risk, which may lead to a more competitive interest rate.

Looking for the best rate? Choose high-value, liquid securities. Use our online LAS calculator to see the rates you may qualify for.

LAS is a preferred choice for both salaried professionals and business owners, thanks to its versatile and user-friendly features:

• Instant liquidity: Raise funds without selling or redeeming your long-term investments.
• Portfolio retention: Continue earning returns, dividends, or capital gains while your securities remain intact.
• Flexible repayment: Many lenders allow interest-only EMIs, bullet repayment, or part prepayments.
• Digital convenience: Manage your loan, check statements, and request top-ups from your online dashboard.
• Top-up facility: Need more funds later? Use the same securities to get additional credit without reapplying.

Liquidity, flexibility, and control, a LAS gives you all three. Apply now to get started

Before pledging your portfolio for a loan, it’s wise to assess a few key factors:

• Interest rates and charges: Compare rates, processing fees, and penalties across lenders.
• LTV ratio: Understand how much loan value you can get against your portfolio and which securities offer better leverage.
• Risk of margin calls: If the market value of your pledged securities drops significantly, the lender may ask you to top up your collateral or repay part of the loan.
• Repayment flexibility: Choose a lender that allows easy prepayment, part-payment, and offers interest-only EMI plans.

A loan against securities works best when you need quick liquidity but want to stay invested. It helps you access funds without selling your shares or mutual funds, making it suitable for short-term or urgent needs. You should consider it when:

• You need immediate funds without disturbing long-term investments.
• Markets are down and selling your portfolio would cause losses.
• You want a lower-cost alternative to unsecured loans.
• You prefer paying interest only on the amount you withdraw.
• You want a flexible credit line for recurring or short-term expenses.

A loan against securities works best when you need quick liquidity but want to stay invested. It helps you access funds without selling your shares or mutual funds, making it suitable for short-term or urgent needs. You should consider it when:

• You need immediate funds without disturbing long-term investments.
• Markets are down and selling your portfolio would cause losses.
• You want a lower-cost alternative to unsecured loans.
• You prefer paying interest only on the amount you withdraw.
• You want a flexible credit line for recurring or short-term expenses.

Not all financial instruments qualify for a LAS, but a wide range of securities are generally accepted. These include:

• Loan against shares: Listed equity shares held in your demat account, preferably from the approved list of stocks.
• Loan against mutual funds: Both debt and equity mutual fund schemes from SEBI-approved fund houses.
• Loan against bonds: Government bonds, corporate bonds, and other listed fixed-income securities that meet the lender’s criteria.

Applying for a LAS is now quicker than ever. Choose between a fully digital or offline method based on your convenience.

1. Visit the Loan Against Securities page.
2. Select your preferred variant of loan against securities to be pledged then click on it.
3. Click on ‘Apply Now’ and enter your mobile number to begin.
4. Complete OTP verification and fill out the short application form.
5. Fill up the form and complete the KYC and documentation process.
6. Upload your documents digitally and submit the form.

A loan against securities offers flexible repayment structures, allowing borrowers to manage cash flows efficiently without disturbing long-term investments. The repayment option chosen typically depends on income patterns, loan tenure, and the lender’s policy. Common repayment options include:

• Interest-only payments: Pay only the interest periodically (monthly/quarterly), with the principal repaid at the end of the tenure.
• EMI-based repayment: Repay both principal and interest through regular EMIs, suitable for predictable income streams.
• Overdraft or credit line model: Withdraw and repay funds as needed and pay interest only on the utilised amount.
• Part-prepayment flexibility: Make partial repayments anytime to reduce interest burden, often without foreclosure charges.
• Bullet repayment: Repay the entire principal in one go at maturity, commonly used by investors expecting future inflows.

The main risks are margin calls, forced liquidation, and interest rate variability — manageable with careful portfolio monitoring.

Despite these risks, a loan against securities can provide liquidity without immediately selling investments, provided the borrower maintains a prudent LTV and monitors the pledged portfolio regularly.

A loan against securities is one of the smartest ways to raise funds especially if you don’t want to disturb your long-term investments. From lower interest rates to flexible repayments and continued returns on your assets, this financing option delivers value on multiple fronts. Whether you are an entrepreneur eyeing an opportunity or an individual managing short-term cash flow, lending against securities offers a fast, flexible, and low-cost route to liquidity.

Get the funds you need while your investments continue to grow. Apply now