Published Mar 31, 2026 4 min read

When financial needs arise, individuals often face a dilemma: how to access funds without disrupting their long-term investments. This is where Loan Against Securities (LAS) comes into play, offering liquidity without requiring you to sell your assets. A critical aspect of this process is determining the desired loan amount—a term that holds significant influence over your borrowing experience. In this article, we will explore the meaning of the desired loan amount, its role in LAS, and how you can determine the right figure for your financial goals. 

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What is desired loan amount?

The term desired loan amount refers to the specific sum of money that a borrower wishes to secure through a loan application. In the context of LAS, this amount is borrowed against pledged financial assets such as shares, mutual funds, fixed deposits (FDs), or insurance policies. 

Think of it as a balance between your immediate financial needs and the value of your pledged securities. For example, if you require Rs. 5 lakh for a short-term expense, you can pledge your assets to secure that amount without liquidating your investments. This enables you to maintain your portfolio’s growth potential while addressing your financial requirements. 

The concept of a desired loan amount is crucial because it directly impacts the lender’s evaluation process, the loan terms, and the overall borrowing experience. 

What does desired loan amount mean in secured lending?

In secured lending, particularly LAS, the desired loan amount is the amount you request to borrow against the value of your pledged assets. It serves as the starting point for the lender’s evaluation process, determining whether your requested amount aligns with the value of your securities and the Loan-to-Value (LTV) ratio. 

The lender assesses the market value of your assets and applies the LTV ratio to calculate the maximum loan amount they can offer. This ensures that the loan remains secured while providing you with the liquidity you need. 

How lenders assess your desired loan amount for LAS?

When you apply for a Loan Against Securities, lenders rely on specific parameters to evaluate your desired loan amount. These include: 

  • Value of pledged securities: The current market value of the financial assets you pledge. 
  • Loan-to-Value (LTV) ratio: The percentage of the asset value that can be borrowed, as determined by the lender. 
  • Loan amount approved: The final amount that the lender is willing to offer based on the above factors. 

Here is a comparison table to illustrate this process: 

Parameter Example 1 Example 2 
Value of pledged securities Rs. 10 lakhs Rs. 20 lakhs 
LTV ratio 50% 50% 
Loan amount approved Rs. 5 lakhs Rs. 10 lakhs 

This evaluation ensures that the loan remains within a safe limit, benefiting both the borrower and the lender. 

Desired loan amount across LAS variants

Different LAS options allow you to pledge various types of financial assets, such as shares, mutual funds, and fixed deposits. Each variant has unique criteria that affect the desired loan amount. Here is a comparison of LAS variants and their pledged asset criteria: 

Las variant Pledged asset Factors affecting loan amount 
Loan against shares Equity shares Market volatility, LTV ratio 
Loan against mutual funds Mutual fund units Net Asset Value (NAV), type of fund 
Loan against fixed deposits Fixed deposit receipts  Deposit Amount 

For instance, loans against shares may offer higher loan amounts for blue-chip stocks due to their stability, while loans against mutual funds depend on the NAV and type of fund (equity or debt). 

Key factors that shape your desired loan amount

Several factors influence the desired loan amount you can request in an LAS application. These include: 

  • Asset value: The current market value of your pledged securities. 
  • Liquidity: The ease with which your securities can be converted into cash. 
  • LTV ratio: The maximum percentage of the asset value that can be borrowed. 
  • Repayment ability: Your capacity to repay the loan within the agreed tenure. 
  • Market conditions: Fluctuations in the value of your pledged assets due to market movements. 

By considering these factors, you can better align your desired loan amount with your financial needs and the lender’s criteria. 

How to determine the right desired loan amount for your LAS application?

Determining the right desired loan amount requires careful planning and evaluation. Follow these step-by-step instructions to calculate the ideal figure: 

Step Action 
1. Assess financial needs Identify the exact amount required for your financial goals. 
2. Evaluate securities Determine the market value of the assets you plan to pledge. 
3. Check LTV ratio Confirm the LTV ratio offered by the lender for your pledged assets. 
4. Align with repayment Ensure the loan amount aligns with your repayment capacity. 
5. Account for market risk Consider potential fluctuations in asset value during the loan tenure. 

By following these steps, you can request a loan amount that meets your needs while ensuring financial stability. 


Mistakes to avoid when specifying your desired loan amount 

When applying for a Loan Against Securities, it is essential to avoid common mistakes that could impact your financial health: 

  • Overestimating your financial needs, can lead to unnecessary debt. 
  • Underestimating your repayment capacity, risking default. 
  • Ignoring market risks that could affect the value of your pledged securities. 
  • Neglecting to account for additional costs, such as interest and fees. 
  • Requesting an amount that exceeds the lender’s approved LTV ratio. 

By avoiding these pitfalls, you can ensure a smoother borrowing experience. 

Conclusion

Understanding and determining your desired loan amount is a crucial step in leveraging your financial assets effectively. By pledging securities such as shares, mutual funds, or fixed deposits, you can access liquidity without liquidating your investments. This approach not only preserves your wealth but also ensures your portfolio continues to grow. By carefully evaluating factors such as asset value, LTV ratio, and repayment capacity, you can determine the right loan amount for your needs. With strategic financial planning, your investments can serve the dual purpose of wealth creation and liquidity. 

Your investment portfolio can serve more than one purpose. Beyond building long-term wealth, it may also help you access funds when financial needs arise. Apply Now  

Frequently Asked Questions

What is the meaning of desired loan amount in a loan application?

The "desired loan amount" refers to the specific amount a borrower requests to meet financial needs. For Loan Against Securities, this is the amount they wish to secure against pledged financial assets. 

How is the desired loan amount determined for a Loan Against Securities?

It is determined based on factors like the market value of pledged securities, the Loan-to-Value (LTV) ratio set by the lender, and the borrower’s repayment ability. 

How does LTV ratio affect the desired loan amount for mutual funds and shares?

The LTV ratio sets the maximum percentage of the asset's value that can be borrowed. For instance, with an LTV of 50% and pledged shares worth Rs. 10 lakh, the maximum loan amount would be Rs. 5 lakh. 

What happens if my desired loan amount exceeds the value of my pledged securities?

If the desired loan amount exceeds the securities' value, the application may be rejected, or the lender may request additional asset pledging. 

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