A loan against securities/shares, is a loan facility offered to customers in which the loan bearer must pledge its security as collateral in order to obtain a loan. Loans against insurance, loans against mutual funds, loans against National Savings Certificates, and other types are available.
A loan against securities is popular among investors because it is a simple way to obtain funding without jeopardizing your security. It also allows you to receive a loan of up to 80% on a variety of financial instruments.
This is a one-of-a-kind service that allows the bearer to benefit from both retaining ownership of your investment and receiving their benefits. People who want fast cash against their investments but do not have liquid cash can use it against listed securities.
In this type of loan, your shares or mutual funds are mortgaged against the loan and held in custody by the bank in question until the loan is fully repaid.
Criteria for Applying for a Loan Against Securities
The following are the requirements for a loan against securities-
- Resident must be an Indian, NRI, or HUF.
- Minimum age for LAS application is 18 years and maximum 70 years.
- You should either be a salaried employee or self-employed and the minimum security value must be 4 Lakh.
- Bank must approve the securities you pledge as collateral.
- There has been no previous default with any financial institution.
- There is no criminal history.
Watch the video to know more about features and benefits of loan against securities.
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