Published on Sept 8, 2026
When you need funds without selling your assets, Loan Against Securities and Loan Against Property are two common secured loan options available. While LAS allows you to borrow against eligible financial investments, LAP uses an eligible property as collateral. This article covers the differences between LAS and LAP across collateral requirements, interest rates, eligibility, and use cases, so you can decide which fits your situation.
The Loan Against Securities meaning refers to a loan facility where you pledge financial assets such as shares, mutual funds, or bonds as collateral. Your investments stay in your name, held in a demat account with depositories like the National Securities Depository Limited (NSDL) or Central Depository Services (India) Limited (CDSL), while the lender places a lien on them. You continue earning any applicable returns while accessing funds against their value.
The Loan Against Property meaning refers to a secured loan in which a property owner mortgages a residential or commercial property to raise funds. The property serves as collateral, while ownership generally remains with the borrower. The lender holds a security interest in the property until the loan is fully repaid. It's commonly used for business expansion, higher education, medical needs, or large personal expenses, and usually carries a longer tenure than LAS.
The Loan Against Securities process generally starts with selecting eligible securities from your portfolio. The lender verifies the holdings and portfolio value, creates a pledge or lien as applicable, and determines the available loan limit based on the applicable Loan-to-Value (LTV) ratio.
Depending on the lender and loan structure, you can access funds against the approved limit. For overdraft-based facilities, interest is generally charged on the amount utilised, and the pledge is released after the outstanding obligations are repaid.
The Loan Against Securities rate is determined by the lender based on factors such as the type of securities pledged, your overall eligibility, and applicable lending policies.
The Loan Against Property process begins with submitting your application and the required financial and property documents. The lender or Non-Banking Financial Company (NBFC) may conduct a property valuation, title verification, and legal check to assess the property's value and ownership status.
Once the checks are completed, the lender determines the loan amount and issues a sanction based on your eligibility and applicable terms. The property is placed under mortgage as security, following which the loan proceeds to disbursal.
Repayment is typically made through an Equated Monthly Instalment (EMI). The applicable Loan Against Property interest rates depend on the lender's policies, your financial profile, property details, loan amount, and other relevant factors.
Comparison between Loan Against Securities vs Loan Against Property becomes clearer when you look at each aspect side by side.
|
Aspect |
Loan Against Securities (LAS) |
Loan Against Property (LAP) |
|
Collateral |
Eligible financial securities, such as shares, mutual funds, bonds, or other lender-approved investments |
Eligible residential or commercial property |
|
LTV ratio for LAS and LAP |
Usually up to 50%* for shares; 50–85%* for mutual funds/bonds |
Up to 60–70%* of property value |
|
LAS interest rate/LAP interest rate |
Varies based on the type of securities, loan structure, borrower profile, and lender policies |
Varies based on the borrower profile, property details, loan amount, and lender policies |
|
Tenure |
Generally suited to relatively shorter-term borrowing, depending on the lender and facility |
Generally offers a longer repayment tenure, subject to the lender's terms |
|
LAS and LAP eligibility |
Loan Against Securities eligibility depends on factors such as the applicant type, eligible securities held, portfolio value, credit score (CIBIL), and lender requirements |
Loan Against Property eligibility generally depends on factors such as income, repayment capacity, property ownership and valuation, applicant profile, and credit score requirements |
This LAS and LAP comparison shows that LAS can be useful for accessing funds against eligible investments, while LAP may be more suitable when seeking a larger loan amount with a longer repayment tenure.
The better option depends on your funding needs and the assets you own. LAS may be suitable if you need relatively short-term liquidity and want to access funds without selling eligible investments.
LAP may be more suitable if you need a larger loan amount with a longer repayment tenure and own an eligible property.
Ultimately, the choice between LAS and LAP should be based on factors such as the required loan amount, repayment period, eligible collateral, interest rate, associated charges, and your repayment capacity.
A Loan Against Securities vs Loan Against Property checklist can help you compare both options based on your financial needs and available assets. Before making a decision, consider the following:
Use this LAS LAP decision checklist to decide upon the more suitable option, and compare lender terms, charges, repayment conditions, and eligibility requirements before applying.
Both LAS and LAP are secured borrowing options that can help you access funds without selling the assets you own. Loan Against Securities benefits can include relatively quick processing and continued ownership of eligible investments, while Loan Against Property benefits can include access to substantial loan amounts and longer repayment tenures, subject to eligibility and lender terms.
At SMFG India Credit, you can access both Loan Against Securities and Loan Against Property. Before applying, compare factors such as eligibility, collateral requirements, loan amount, tenure, interest rates, and documentation to determine which option may better suit your financial requirements. Feel free to reach out to us for guidance on the best loan option that suits your requirements.
* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us
The better option depends on your needs. LAS may suit relatively short-term funding against eligible investments, while LAP may be more suitable for larger funding requirements and longer repayment tenures.
LAS may have a relatively shorter processing time because it does not require property valuation and title verification. However, actual approval and disbursal timelines depend on the lender, applicant, securities, documentation, and verification requirements.
Yes, LAP funds can be used for business expansion, working capital, or other legitimate personal and business needs.
If the value of pledged securities falls and the required margin is not maintained, the lender may ask you to provide additional eligible securities or repay part of the outstanding amount, depending on the facility terms.
LAS can have a shorter processing time than LAP because it generally does not involve property valuation, title verification, and other property-related checks. However, processing times ultimately depend on the lender and application.
A loan against shares or loan against mutual funds may be processed relatively quickly when the securities and applicant meet the lender's requirements. However, exact approval and disbursal timelines depend on verification, documentation, and lender policies.
The LTV ratio varies based on the type of securities or property pledged, the lender, and applicable regulatory requirements. Borrowers should check the lender's current LTV limits for the specific LAS or LAP product before applying.
Possibly, depending on the lender's eligibility criteria. Since LAS is secured by eligible securities, their value is an important consideration. However, lenders may also assess your credit profile and other eligibility factors before approving the facility.
Depending on the lender, eligible securities may include approved shares, mutual fund units, bonds, and other specified investments. The exact list of acceptable securities and the loan amount available against them can vary by lender.
LAP can provide access to substantial loan amounts because borrowing is based partly on the value of the eligible property. However, the final sanctioned amount available under LAS or LAP depends on collateral value and lender criteria.
Yes, your securities remain invested and can continue earning returns, even while pledged as collateral under LAS.
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