Types of Securities You Can Take A Loan Against!

If you are considering a Loan Against Securities (LAS), one of the first questions that may come to mind is what you can actually pledge as collateral. With so many financial instruments available, understanding which ones qualify as pledgeable securities for loan purposes is important. You might also wonder how the types of securities for LAS influence the Loan-to-Value Ratio (LTV) offered by the lender, and whether this affects the loan amount you can borrow.

This article will walk you through the different categories of securities typically accepted for an LAS and help you understand how they fit into a secured loan arrangement.

Must Read: How to Get a Loan Against Securities

What Does It Mean to Pledge Securities for a Loan?

In simple terms, pledging securities for borrowing means offering your existing investments to a lender as security in exchange for funds. Under a Loan Against Securities (LAS), you can use shares or other approved financial instruments as collateral. The lender then determines the amount you can borrow based on your eligibility, creditworthiness, the market value of these assets, and the applicable Loan-to-Value Ratio (LTV).

Types of Securities You Can Pledge for a Loan in India

Several investment options can serve as collateral for a Loan Against Securities. Here are the most common:

1. Shares (Equity Stocks)

Loan against shares and stocks is one of the most popular ways to raise funds. By pledging listed equity shares, you can unlock liquidity without having to sell them, while still retaining ownership and potential market gains.

2. Mutual Funds

Many lenders allow mutual funds as loan collateral, including both equity and debt schemes. The value of the pledged units and market performance usually determine the loan amount you can borrow.

3. Bonds

You can also pledge bonds, including corporate and government bonds for loans.

4. ETFs

Exchange-Traded Funds (ETFs) are another option you can pledge. They combine the features of mutual funds and stocks, offering diversification while serving as an acceptable security for a loan.

Depending on lender policies, other types of securities for LAS may also include debentures, insurance policies, fixed deposits (FDs), National Savings Certificates (NSCs), and Kisan Vikas Patra (KVP).

Eligibility Criteria and Process to Avail a Loan Against Securities

Eligible entities to avail of a LAS include Resident Indian individuals, Public and Private Limited Firms, Partnership Companies, Limited Liability Partnerships (LLPs), Private Trusts, Sole Proprietorships, and Hindu Undivided Families (HUFs).

They must also meet the following eligibility criteria to enjoy loan approval with competitive LAS interest rates:

• Be at least 21 years of age and show proof of steady income
• Have a valid Savings, Current, and Demat Account
• Hold approved bonds with a minimum value of INR 10 lakhs
• Have a minimum credit score of 600

Here’s how you can complete the online application process at SMFG India Credit:

1. Initiate your application here.
2. Enter basic personal and security-related information.
3. Receive a reference number after successful submission. Our representative will connect with you to take you through the next steps.

To apply offline, visit your nearest SMFG India Credit branch and meet a customer care representative. You can also call our toll-free number 1800 419 8900 from 9:00 AM to 7:00 PM (on all days except Sundays, the 4^th Saturday of the month, and public holidays), or reach out at [email protected].

Conclusion

A Loan Against Securities (LAS) offers a practical way to access funds while keeping your investments intact. By pledging approved financial instruments, you can secure liquidity with ease and flexibility. With an SMFG India Credit LAS, you can benefit from an LTV of up to 50–85%*, competitive interest rates, and quick processing. To get started, review the LAS eligibility criteria and documents, and apply online or at your nearest branch today.