Which securities are accepted for Loan Against Securities?

Accepted securities vary by lender but typically include: (1) Listed equities — Nifty 500 / BSE 500 stocks at 50% LTV; (2) Equity mutual funds — approved funds at 50–60% LTV; (3) Debt mutual funds — at 70–80% LTV; (4) Government securities and bonds — at 80–90% LTV; (5) Fixed Deposits — at 85–90% LTV; (6) Sovereign Gold Bonds — at 50–65% LTV; (7) Insurance policies — up to 80–85% of surrender value. Some lenders also accept ETFs and listed NCDs.

What is the Loan-to-Value (LTV) ratio for LAS?

LTV varies by security type per SEBI and RBI guidelines: Listed equities (Nifty 500): up to 50%; Equity mutual funds: 50–60%; Debt mutual funds: 70–80%; Government securities/bonds: 80–90%; FDs: 85–90%; Sovereign Gold Bonds: 50–65%. The LTV determines your maximum credit line. For example, ₹1 Crore in equities gives you up to ₹50 Lakh as credit line; ₹1 Crore in FDs gives up to ₹85–90 Lakh.

What happens if my portfolio value falls and triggers a margin call?

If your portfolio value falls and the outstanding loan exceeds the allowable LTV, the lender issues a margin call — requesting additional collateral, partial repayment, or pledge of more securities within 24–48 hours. If unaddressed, the lender may sell pledged securities to recover the dues. To avoid margin calls, maintain a 15–20% buffer between your actual LTV and the maximum permitted LTV, especially for equity portfolios.

How quickly can LAS be processed and disbursed?

LAS processing is among the fastest in the lending industry — 24 to 48 hours for existing customers of major banks with demat accounts. The pledge is created digitally via NSDL/CDSL depository systems. For mutual fund pledges, the process is handled via the AMC/CAMS/KFintech. Finvastra helps coordinate the pledge request and lender documentation to minimize turnaround.

What is the maximum amount available under LAS in India?

There is no fixed maximum — the credit line is a function of your portfolio value and the applicable LTV. Retail LAS facilities are available from ₹1 Lakh to ₹5 Crore at banks and NBFCs. For HNI and institutional borrowers, LAS credit lines of ₹10 Crore and above are common via private banks and broker-dealer arrangements. The maximum single-stock concentration is typically capped at 25–50% of total pledged value.

Can I use a Loan Against Securities for business purposes?

Yes. LAS is widely used by promoters and business owners to fund working capital, bridge gaps, or invest in business opportunities — without disrupting their long-term investment portfolio. Unlike a business loan, LAS does not require GST returns, balance sheets, or business vintage. It is assessed purely on the quality and value of the pledged securities and the borrower's CIBIL score.

Shares · Mutual Funds · Bonds · FDs · Up to 80% LTV

Loan Against Securities —
Access Liquidity Without Selling Your Investments

Q: What is a Loan Against Securities (LAS)?

A Loan Against Securities (LAS) is an overdraft facility where you pledge your financial assets — listed shares, mutual fund units, bonds, government securities, FDs, or insurance policies — as collateral to access a revolving credit line. You pay interest only on the amount drawn, not on the entire sanctioned limit. Your pledged investments remain in your demat or folio and continue to earn dividends, interest, and capital appreciation during the loan period.

Q: How is LAS different from a personal loan?

LAS is significantly cheaper (9–14% p.a. vs 14–24% p.a.), works as an overdraft (draw and repay as needed, pay interest only on drawn amount), and does not require income documentation. A personal loan is unsecured and requires regular EMI repayments regardless of cash flow. LAS is ideal if you have a strong investment portfolio and want flexible, low-cost liquidity without liquidating assets.

Q: Is the interest on LAS tax-deductible?

If the LAS proceeds are used for business purposes or for purchase of another investment, the interest may be deductible under Section 57 (income from other sources) or under business income provisions. If used for personal consumption, interest is not deductible. Consult a tax advisor for your specific situation. The capital gains treatment on the pledged securities is not triggered until they are actually <old — pledging alone does not create a taxable event.

Q: Do I still receive dividends on shares pledged for LAS?

Yes. The pledge is a lien on the securities — ownership does not transfer to the lender. You continue to receive dividends, bonus shares, and rights entitlements on pledged equities. Mutual fund units continue to reflect NAV appreciation. The only restriction is that you cannot sell the pledged securities until the pledge is released (loan repaid). This is the key advantage over liquidating your portfolio.

Your investment portfolio is your most liquid collateral. Pledge your shares, mutual funds, bonds, or FDs to unlock an overdraft at 9–14% p.a. — pay interest only on what you draw. Your investments stay in your name, continue to earn, and are released the moment you repay.

Apply for LAS How LAS Works

Up to 80%

LTV on FDs & Bonds

9% – 14%

Interest Rate p.a.

Overdraft

Revolving Credit Line

24 Hours

Processing Time

LAS Explained

What is a Loan Against Securities?

A Loan Against Securities (LAS) is a revolving overdraft facility secured by pledging financial instruments you already own. The lender places a lien on your securities through the NSDL or CDSL depository system — you retain ownership, continue to receive dividends and appreciation, but cannot sell the pledged assets until the loan is repaid.

Unlike a term loan with fixed EMIs, LAS works like an overdraft: draw what you need, repay when you can, and pay interest only on the outstanding balance. This makes it far more cost-efficient for borrowers who need short-to-medium-term liquidity without disrupting their long-term investment strategy.

Market Opportunity

A new investment opportunity arises but funds are locked in existing holdings. Pledge to participate without breaking your portfolio.

Business Liquidity

Promoters and business owners use LAS for working capital, vendor payments, or to bridge a short-term cash flow gap — without business documentation.

Property Down Payment

Pledge your MF or equity portfolio to fund a property down payment. Repay after your home loan disbursement or a property sale.

Education or Emergency

Sudden large expenses — education abroad, medical emergencies, foreign travel — met at 9–11% without breaking long-term investments.

Eligible Collateral

Which Securities Are Accepted & What LTV Do They Get?

Security Type	Typical LTV	Notes
Listed Equities (Nifty 500 / BSE 500)	Up to 50%	SEBI regulated cap. Illiquid / small-cap stocks may be excluded.
Equity Mutual Funds	50 – 60%	Approved fund list varies by lender. ELSS funds have 3-year lock-in.
Debt Mutual Funds	70 – 80%	Low volatility = higher LTV. Liquid, ultra-short, and short-duration funds preferred.
Government Securities & Bonds	80 – 90%	G-Secs, SDLs, and rated corporate bonds. Highest LTV due to low default risk.
Fixed Deposits (Bank FDs)	85 – 90%	Lien marked on FD. FD interest continues to accrue during pledge period.
Sovereign Gold Bonds (SGBs)	50 – 65%	SGB interest of 2.5% p.a. continues during pledge. Treated like equity LTV.
Insurance Policies (LIC / Others)	Up to 85%	Based on surrender value. Traditional / endowment policies; not ULIPs.

LTV ratios are indicative and vary by lender. SEBI caps equity LTV at 50% for individual retail borrowers.

Smarter Borrowing

LAS vs Personal Loan vs Liquidating Your Portfolio

Factor	Loan Against Securities	Personal Loan	Sell Investments
Interest Rate	9 – 14% p.a.	14 – 24% p.a.	—
Investments Continue to Grow	✓ Yes	✓ Yes	✗ No
Dividends / Interest Received	✓ Continues	N/A	✗ Lost
Tax on Transaction	None	None	LTCG / STCG
Repayment Structure	Flexible OD	Fixed EMI	N/A
Income Documentation	Not Required	ITR / Salary Slips	N/A
Processing Time	24 – 48 Hours	24 – 72 Hours	T+2 Days

Portfolio review for Loan Against Securities

Real Example

₹50 Lakh OD Against ₹1 Crore Equity Portfolio — Banjara Hills Investor

A software professional with a ₹1 Crore Nifty 500 equity portfolio identified a pre-launch residential opportunity in Gachibowli that required ₹50 Lakh within 15 days. Selling equities would trigger ₹12 Lakh in capital gains and mean exiting positions near multi-year highs.

Finvastra arranged a ₹50 Lakh LAS overdraft at 11.5% p.a. against the equity portfolio. Monthly interest drawn: ₹47,917. The portfolio appreciated 16% over the subsequent 10 months. The OD was closed after the first rental income tranche was received. Net outcome: portfolio gain of ₹16 Lakh far exceeded the ₹4.79 Lakh total interest cost.

Scenario is representative. Portfolio performance is not guaranteed. Past market conditions may not repeat.

Free Tool

LAS Overdraft Interest Calculator

Estimate your maximum credit line and monthly interest cost based on your portfolio value and security type.

Portfolio / Security Value ₹50,00,000

₹5L₹5Cr

LTV Percentage 50%

40% (Equities)90% (FDs/Bonds)

Interest Rate (p.a.) 11.00%

9%15%

Interest is charged only on the amount drawn from the credit line, not on the full sanctioned limit.

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₹--

Maximum Credit Line (Sanctioned Limit)

₹--

Monthly Interest (Full Draw)

₹--

Annual Interest (Full Draw)

Shown at full credit line utilisation. Actual interest is proportional to the amount drawn.

Eligibility & Process

Who Can Apply & What You Need

Eligible Borrowers

Individual / HUF / Firm

Min CIBIL

700+

Min Portfolio

₹5 Lakh

Renewal

Annual

How the Pledge Works

For shares: a pledge instruction is submitted through your broker or bank to NSDL/CDSL. The depository marks the securities as pledged against the lender's DP account. No physical transfer occurs. For mutual funds: the pledge request is submitted to the registrar (CAMS or KFintech) via the lending bank's interface. The AMC marks a lien on the units. In both cases, the process is digital and typically completed within 24–48 hours.

Documents Required for LAS

KYC — PAN card, Aadhaar card, address proof
Recent demat account statement or mutual fund portfolio statement (not older than 30 days)
Passport-size photograph
Bank account proof — cancelled cheque or passbook
For businesses — GST registration, company PAN, board resolution (for overdraft in company name)
Income proof is generally not required for LAS — portfolio value is the primary assessment criterion

Margin Call — What It Means and How to Avoid It

A margin call is triggered when your portfolio value falls and the outstanding loan exceeds the permitted LTV. The lender will notify you and request one of: (a) additional securities pledged, (b) partial repayment to bring the loan within LTV, or (c) cash deposit as additional margin. If unaddressed within 24–48 hours, the lender may liquidate pledged securities.

Best practice: Keep your actual drawn amount 20–25% below the maximum credit line. For a ₹50 Lakh sanctioned OD against equities, typically draw no more than ₹37–40 Lakh to absorb a 15–20% market correction without a margin call.

Clients Served

Across Hyderabad & Telangana

₹0Cr+

Loans Disbursed

Home, Business & MSME

Lender Partners

Banks, NBFCs & Fintechs

Client Satisfaction

Based on client feedback

Got Questions?

Loan Against Securities — FAQs

What is a Loan Against Securities (LAS)?

A Loan Against Securities is an overdraft facility where you pledge financial assets — shares, mutual fund units, bonds, FDs, or insurance policies — as collateral for a revolving credit line. You retain ownership, continue to earn dividends and appreciation, and pay interest only on the amount drawn. The pledge is released when the loan is repaid.

Which securities are accepted for LAS?

Accepted securities typically include: Nifty 500 / BSE 500 listed equities (50% LTV), equity mutual funds (50–60% LTV), debt mutual funds (70–80% LTV), government securities and bonds (80–90% LTV), bank FDs (85–90% LTV), Sovereign Gold Bonds (50–65% LTV), and insurance policies up to 85% of surrender value. ELSS funds with active lock-in are generally not accepted.

What LTV ratio will I get on my securities?

LTV varies by security type. Listed equities: up to 50% (SEBI cap); equity MFs: 50–60%; debt MFs: 70–80%; government bonds: 80–90%; FDs: 85–90%; SGBs: 50–65%; insurance policies: up to 85% of surrender value. For example, ₹1 Crore in equity MFs gives you up to ₹50–60 Lakh as credit line.

What is a margin call and how do I avoid it?

A margin call is triggered when your portfolio value drops and the outstanding loan exceeds the permitted LTV. The lender requests additional collateral, partial repayment, or cash margin within 24–48 hours. If ignored, they may liquidate pledged securities. To avoid margin calls, keep your actual draw 20–25% below the maximum credit line — this creates a buffer to absorb market corrections without triggering the threshold.

How is LAS different from a personal loan?

LAS is significantly cheaper (9–14% vs 14–24% p.a.), works as a flexible overdraft (not fixed EMIs), and does not require income documentation. Personal loans are unsecured and require monthly repayments. LAS is ideal if you have a strong investment portfolio and want low-cost, flexible liquidity without disrupting your long-term wealth strategy.

Is the interest on LAS tax-deductible?

If the LAS proceeds are used for business purposes or acquiring another income-producing asset, the interest may be deductible under Section 57 or business income provisions. For personal consumption, interest is not deductible. Pledging securities alone does not trigger a capital gains event — tax is only applicable when you actually sell the securities.

How quickly can LAS be approved and disbursed?

LAS is among the fastest loan products — most banks and NBFCs process and disburse within 24 to 48 hours for existing customers with a demat account. The pledge is created digitally via NSDL/CDSL for equities, and via CAMS/KFintech for mutual fund units. Finvastra coordinates the pledge creation and lender documentation to minimise processing time.

Do I still receive dividends on pledged shares?

Yes. Pledging creates a lien — ownership does not transfer to the lender. You continue to receive dividends, bonus shares, and rights entitlements. Mutual fund units continue to reflect NAV appreciation. The only restriction is that you cannot sell the pledged securities until the pledge is released. This is the key advantage over liquidating your portfolio outright.

What is the maximum amount I can borrow under LAS?

There is no fixed maximum — the credit line equals your portfolio value multiplied by the applicable LTV. Retail LAS facilities range from ₹1 Lakh to ₹5 Crore at most banks and NBFCs. For HNI borrowers, credit lines of ₹10 Crore and above are available via private banks. Concentration in a single stock is typically capped at 25–50% of the total pledged portfolio.

Can promoters or business owners use LAS for business working capital?

Yes, and this is one of the most common use cases. Promoters pledge their listed shareholding or investment portfolios to fund working capital, bridge a cash flow gap, or take advantage of a business opportunity — without requiring balance sheets, ITRs, or turnover records. LAS is assessed purely on the portfolio value and the borrower's CIBIL score, making it fast and minimally intrusive.

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Loan Against Securities —Access Liquidity Without Selling Your Investments