What is Loan Against Securities?
Loan against securities is a type of personal loan in which you pledge your life insurance policies, stocks, shares, bonds, fixed maturity plans and mutual funds as security/collateral with the lender against the borrowed amount. Loan against securities is the same as overdrafts in which you can withdraw money from your bank account and pay interest only on the utilized amount. It helps you to raise funds to meet your urgent cash requirements. Read on for its features, interest rates, eligibility, documents required and much more.
Features of Loan Against Securities (LAS)
- Interest rate: 7.75% p.a. onwards
- Loan amount from Rs. 25,000 and up to Rs. 20 lakh, may exceed
- No-end use restriction
- Secured personal loan – Security/Collateral is required by the bank
- Acts almost the same as an Overdraft facility
- Interest rate paid only on the utilized amount
- Repayment Tenure: Up to 3,6,9,12 months – Shall vary as per lender
- Loan against pledged investments in form of policies, shares, bonds, etc.
- High loan to value: Loan up to 85% of the asset value of your securities
Loan Against Securities Interest Rates – 2022
Find below the interest rates offered by leading financial institutions:
- SBI – Loan against Securities
| Scheme | Interest Rate p.a. |
| Loan against Sovereign Gold Bond | 9.25% |
| Loan against Shares, Mutual Funds & Dual Advantage Fund | 9.75% |
| Loan against NSC/ KVP/ RBI Relief Bond/ Surrender Value of SBI Life/ LIC/ SBI Magnum | 11.90% |
- IDBI Bank: 7.75% – 8.75% p.a.
- Axis Bank: 9.00% p.a.
- Kotak Mahindra Bank: 9.25% – 13% p.a.
- HDFC Bank: 9.90% p.a.
- Bajaj Finserv: 10.00% p.a.
- Tata Capital: 10.50% p.a.
- Federal Bank: 12.50% p.a.
Additional Lenders offering LAS
Additional Leading Banks/NBFCs offering LAS at competitive interest rates include ICICI Bank, Yes Bank, IndusInd Bank, Bank of Baroda, Standard Chartered, IIFL Finance, Fullerton India and many more.
Eligibility Criteria for Loan Against Securities
- Applicants must be Indian residents
- Age: Minimum 18 years and maximum 70 years
- Salaried or self-employed individuals are eligible
- Must have approved securities to pledge
- No previous default with any financial institution
- No past criminal background
Detailed List of approved Securities from selected Banks/NBFCs
- Life Insurance Policies
- Mutual Funds
- Demat Shares
- Stocks
- Equity Shares
- Fixed Maturity Plans (FMPs)
- Employee Stock Ownership Plan (ESOP)
- Initial Public Offerings (IPOs)
- Exchange Traded Funds (ETF)
- Gold Deposit Certificates (GDC)
- National Savings Certificates (NSC)
- Kisan Vikas Patra (KVP)
- Non-Convertible Debentures (NCD)
- NABARD’s Bhavishya Nirman Bonds and many more
Documents Required to apply for Loan against Securities
- Duly filled application form and loan agreement
- Passport-sized photographs
- Applicant’s KYC documents: Identity proof, Age proof and Address proof
- Demat Account Statement or Statement of Holdings (MF)
- Pledge form or request letter for pledging of securities
- Guarantor Form – Optional (Mandatory for Joint holding)
- Any other document required by the bank/NBFC