Loan Against Securities

Your equity portfolio is a productive asset — you should not have to sell it to access cash. Pledging listed shares as collateral lets you raise funds while the portfolio keeps working, without triggering a taxable event or losing position.

• Pledge of approved listed shares held in your demat account.
• Eligible stock list and per-stock LTV bands communicated upfront — no surprises at disbursal.
• Lien marking via standard depository pledge — the shares remain in your demat, not transferred.

Redeeming mutual funds to meet a cash need means exiting a compounding position, and usually triggering a tax liability. Pledging them as collateral achieves the same liquidity without either consequence.

• Equity, debt, and hybrid mutual fund units accepted as collateral, subject to scheme eligibility.
• No redemption, no capital gains event, no break in the compounding cycle.
• LTV bands differ by scheme category — equity funds typically attract lower LTVs than liquid or debt schemes.

Bonds and eligible insurance policies widen the collateral pool beyond equity and mutual funds. These carry specific eligibility rules and, in the case of policies, a fundamentally different lending mechanism from securities-backed overdrafts.

• Bonds and NCDs accepted as collateral, subject to issuer eligibility and rating floors.
• Loans against insurance policies are typically against the policy's surrender value — a distinct facility from securities-backed lending.
• Clear separation of the two mechanisms so you understand which product you are actually using.

LAS is structured as an overdraft, not a lump-sum loan. You draw only what you need, when you need it, and interest is charged on the drawn amount for the days it is used. This is often the single biggest cost advantage over a personal loan.

• Interest charged only on the amount actually drawn, not on the full sanctioned limit.
• Withdraw, repay, and re-withdraw within the sanctioned limit — no fresh application each time.
• Rate benchmarks, reset frequency, and processing charges disclosed before you sign.

How much you can borrow depends on what you pledge and how the lender values it. The 50–70% LTV range is a general guideline — actual limits vary by asset type, liquidity, and lender policy.

• LTV bands differ across shares, mutual funds, bonds, and policies — typically lower for volatile assets.
• Valuation methodology — last traded price, NAV, or surrender value — disclosed upfront.
• Diversification of collateral across assets to reduce concentration and support higher overall LTV.

This is the most under-disclosed risk in LAS: if the pledged collateral loses value and the LTV breaches the agreed threshold, the lender can require additional collateral or force-sell the pledged assets to make good the shortfall. That is a real risk, and it needs to be understood before you borrow.

• Clear explanation of what triggers a margin call and what the top-up or sell-down process looks like.
• Advance notice periods, cure windows, and notification channels disclosed at the time of borrowing.
• Conservative initial LTV so you are not walking the edge from day one — a buffer against volatility, not a maximiser of drawdown.

LAS is usually cheaper than a personal loan or credit card on rate — but the total cost depends on how long you draw, how much you draw, and what fees apply. Comparing on rate alone is not enough.

• Rate comparison against personal loans, credit cards, and other secured borrowing options.
• Total cost analysis including processing fees, renewal charges, and any minimum-utilisation conditions.
• Repayment planning aligned to when you actually expect to repay — so you are not paying interest on a facility you no longer need.