Loan Against Security
A Loan Against Security (LAS) is a financial arrangement where an individual or business can borrow money by pledging their financial securities, such as stocks, bonds, or mutual funds, as collateral. This type of loan allows the borrower to access funds while retaining ownership of their securities. The lender holds the securities until the loan is repaid. LAS offers a flexible and convenient way to meet financial needs without liquidating investments.
A Loan Against Security (LAS) is a type of secured loan where the borrower pledges financial assets such as shares, bonds, mutual funds, or other marketable securities as collateral to obtain a loan. The loan amount is typically a percentage of the market value of the pledged securities. This type of loan provides quick access to funds while allowing the borrower to benefit from any potential appreciation in the value of the securities. The borrower continues to earn dividends or interest on the pledged securities during the loan period.
Advantages of an Loan Against Security
LAS provides a fast and efficient way to access funds without selling your investments.
Borrowers retain ownership of their securities and continue to earn dividends or interest.
The loan amount can be adjusted based on the value of the pledged securities, offering flexibility.
LAS generally offers lower interest rates compared to unsecured loans due to the collateral provided.
Many LAS products allow borrowers to repay the loan early without incurring prepayment penalties.
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Loan Against Security
Loan Against Shares
A Loan Against Shares (LAS) allows borrowers to pledge their equity shares to obtain a loan. The loan amount is determined by the current market value of the shares and the lender’s margin requirements. Borrowers can leverage their stock portfolio to meet financial needs without selling their shares.
Loan Against Mutual Funds
This type of LAS allows borrowers to pledge their mutual fund units as collateral. The loan amount is based on the net asset value (NAV) of the mutual fund units. Borrowers can continue to benefit from the growth potential of their mutual fund investments while accessing necessary funds.
Loan Against Bonds
A Loan Against Bonds enables borrowers to pledge their fixed-income securities, such as government or corporate bonds, as collateral. The loan amount is based on the market value of the bonds. This type of LAS is ideal for individuals seeking liquidity while holding onto their fixed-income investments.
Loan Against Insurance Policies
Certain life insurance policies with a cash value component can be used as collateral for a loan. The loan amount is based on the surrender value of the policy. Borrowers can access funds while maintaining their life insurance coverage.
Meet Our Loan Against Security Specialist
Jeanette Kingston
Mutual Funds Expert
Alisa John
Vice President
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