What are the benefits of a loan against securities?
Here’s why thousands of investors prefer lending against securities over liquidating them:
- Lower interest rates: Interest typically ranges from 8% to 15%, 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- Pay interest only on what you use: Works like an overdraft pay interest only on withdrawn amounts.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 18 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.
Eligibility criteria for loan against securities
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 18 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
Fees and charges involved in a LAS
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.
What affects your interest rate?
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.
Features of a loan against securities
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
Things to consider before you apply
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.
What securities can be pledged?
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.
How to apply for a loan against securities?
Applying for a LAS is now quicker than ever. Choose between a fully digital or offline method based on your convenience.
- Visit the Loan Against Securities page.
- Select your preferred variant of loan against securities to be pledged then click on it.
- Click on ‘Apply Now’ and enter your mobile number to begin.
- Complete OTP verification and fill out the short application form.
- Fill up the form and complete the KYC and documentation process.
- Upload your documents digitally and submit the form.
Conclusion
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
