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A Loan Against Shares (LAS) is a type of Loan Against Securities where individuals can pledge their listed shares to access funds without selling their investments. Opting to pledge shares for a loan offers a convenient way to meet personal or business-related expenses while retaining the ownership of your assets. With the digital shift, applying for a Loan Against Shares online has become increasingly popular for its speed and convenience.
Let’s break down the concept of a loan using shares as collateral, including its key features, eligibility criteria, required documents, and the application process.
Features and Benefits of a Loan Against Shares
Opting for our instant Loan Against Shares comes with a wide range of benefits, such as:
- No Need to Sell Your Shares: You continue to earn dividends and enjoy capital appreciation.
- Competitive Loan-to-Value (LTV) Ratios: Depending on the share's category and market value, along with your overall eligibility, you can get an LTV of up to 50%*.
- Fast Processing: With minimal documentation and digital-first processes, you can usually enjoy quick turnaround times, subject to eligibility and documentation.
- Flexible Repayment, No Prepayment Charges*: Borrowers have the freedom to prepay before the end of the tenure, typically without prepayment penalties, offering greater control over financial planning.
- Attractive Interest Rates: Compared to unsecured loans, Loan Against Shares interest rates are relatively lower because the shares serve as collateral, reducing the lender’s risk.
*Terms & Conditions apply
Eligibility Criteria for a Loan Against Shares
The Loan Against Shares eligibility criteria at SMFG India Credit are straightforward and include the following:
- Applicants must be at least 21 years old.
- A stable source of income must be demonstrated through valid documentation.
- You must hold an active Savings or Current Account along with a Demat Account.
- The applicant should hold approved listed shares with a minimum value of INR 10 lakhs.
- A credit score of 600 or above is expected to qualify for the loan.
*Please note that this is only the basic eligibility criteria. The final eligibility will depend on a number of parameters, including SMFG India Credit’s policy at the time of loan application.
Who Can Apply for a Loan Against Shares?
SMFG India Credit extends Loans Against Shares to a variety of customer segments. If you hold eligible shares, you may be able to apply under one of the following:
- Individual Applicants
Resident Indian individuals fulfilling the basic eligibility criteria are welcome to apply. - Non-Individual Applicants
The facility is also available to various types of organisations and entities, including:
- Hindu Undivided Families (HUFs)
- Private Trusts
- Public or Private Limited Companies
- Partnerships
- Sole Proprietorships
- Limited Liability Partnerships (LLPs)
Documents Required for a Loan Against Shares
The list of documents required for a Loan Against Shares generally includes:
|
Type of Document |
Particulars |
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PAN Card (Mandatory) |
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Proof of Identity (POI) and Proof of Address (POA) Document |
|
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Income Documents** |
|
|
Other Documents (one or more may be requested) |
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**As applicable
Please note that if a co-applicant is involved, their basic documents, such as PAN, KYC documents, etc., will also be required.
The above list is indicative. Depending on the specific loan product, your profile, and our policy at the time of loan application, additional documents may be requested.
Important Points to Remember:
- Keep original identity proofs, address proofs, and any other required documents handy for onsite verification. This step may not be needed if digital KYC is completed.
- If your current address is not reflected in the provided proof, you can submit one of the approved Deemed OVDs. Click here to view the list.
- An Officially Valid Document (OVD) showing your current address must be submitted within three months of providing the initial address proof.
Interest Rates and Charges for a Loan Against Shares
Interest rates for a Loan Against Shares depend on factors such as the type of shares pledged, their market value, and the applicant’s credit profile.
In addition to interest, there may be certain associated charges to account for. These typically include a processing fee, stamp duty or registration charges as per applicable state laws, and, in some cases, fees for annual account maintenance/renewal, and liquidation charges*.
To avoid surprises, it’s advisable to review the loan agreement carefully and understand all applicable terms, fees, and conditions before proceeding with a loan facility against shares.
*Applicable for Securities in demat form.
How to Apply for a Loan Against Shares Online
Here’s how to easily submit an online LAS application at SMFG India Credit:
- Click here to begin your Loan Against Shares application.
- Provide your personal details and the required shareholding information.
- You will receive a reference number, and our representative will reach out to assist you with the next steps.
You may also apply in person by visiting any SMFG India Credit branch and speaking with a customer care executive. For assistance, you can call our toll-free number 1800 419 8900 (available 9:00 AM to 7:00 PM, except Sundays, 4th Saturdays, and public holidays) or write to us at [email protected].
Your Loan Against Shares Awaits – Quick, Flexible, and Secure
A Loan Against Shares is a practical solution for raising funds without having to sell your investments. Whether you're looking to cover emergency personal expenses or infuse capital into your business, this form of loan using shares as collateral provides flexibility, attractive interest rates, and convenient online processing.
SMFG India Credit offers customised Loan Against Securities solutions with amounts ranging from INR 5 lakhs to INR 20 crore*. Apply online today and take a confident step toward achieving your financial goals.
* Please note that loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms and disbursal process will be subject to SMFG India Credit's policy at the time of loan application. If you are an existing customer and wish to foreclose your loan, please note that foreclosure terms and charges will be applicable as per our policy at the time of loan foreclosure.
FAQs
What is a Loan Against Shares?
A Loan Against Shares is a type of secured loan where you can pledge your listed shares to receive funds without selling them. You continue to retain ownership of the shares while using the approved funds for personal or business needs.
What are the eligibility criteria for a Loan Against Shares?
To be eligible, you must be an Indian resident aged 21 or above, have a Demat account, hold approved shares of a minimum value, and meet the lender’s income and credit score requirements.
Which shares are accepted under a Loan Against Shares?
Shares approved by the lender and listed on major stock exchanges like NSE and BSE are generally accepted. These must be held in a Demat account.
What is the loan-to-value offered against the shares provided?
The LTV typically goes up to 50%*, depending on the lender's policies and the type of shares pledged.
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Insurance disclaimer SMICC is registered with the Insurance Regulatory and Development Authority of India (IRDAI) as a Corporate Agent. IRDAI Registration No.: [CA0098] CIN No. U65191TN1994PLC079235. The insurance policy is a contract between the customer and the insurance company, and policy is underwritten by insurance companies. SMICC acts only as the distributor and is not responsible for any risk, policy issuance, claim settlement/repudiation etc. Insurance is the subject matter of solicitation. Purchase of insurance is voluntary and subject to insurer underwriting and policy terms and conditions. Customers are advised to read the policy terms and conditions, benefits, exclusions, claim settlement carefully before purchase. Kindly note that “Insurance Products” are not mandatory for the purpose of the application and disbursement of loan. It shall be the sole discretion of the customer, by providing explicit consent, to avail such insurance along with the Loan.
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