Is Loan Against Securities a Good Idea?
Is Loan Against Securities a Good Idea?
The simplest way to get quick money is to go for a loan. It’s one way of specifying your current financial requirements Know the features and benefits of Loan Against Securities.

Loan practice has become normal because of the inevitable desire of wanting things, either materialistic or non-materialistic. The increasing financial needs of people. Now any financial urgency can be met by a loan.

There are various types of loans, such as personal loans, business loans, gold loans, car loans, education loans, loan against property (LAP) loan against securities (LAS), etc. All these kind of loans are grouped into two categories, i.e., secured loans and unsecured loans. In this article, we’ll be talking about a loan against security (LAS). See if opting for a loan against security is a good idea or not.

What is Loan Against Securities?

Loan against securities or LAS is a secured personal loan taken by the borrower, where he/she puts his/her securities with the lender as collateral till the total loan payment is fulfilled. The securities can be mutual funds, stocks, bonds, insurance, etc. Unlike unsecured loans, the interest rates in secured loans are mostly lower because the lender is safe. If the borrower defaults on repayment, he can sell the pledged securities and recover his losses.

Selecting the right type of loan can be a bit cumbersome. So, it’s significant on the part of the people to have the necessary knowledge of secured and unsecured loans. If you need quick money at a low-interest rate, a loan against security will get your job done.

Loan against securities or LAS gives the borrower the relaxation to use securities as leverage. For getting additional funds to meet your charted requirements. The basic criteria for a loan against security are that the borrower should have securities in dematerialization form or in demat account.

Is Loan Against Securities a Good Idea?

So far, you have understood the concept of a loan against security. If you have securities that are in your demat account, then you are good to go to apply for a loan against security. The best feature of a loan against security is that you can use the money for any purpose. Like paying hefty medical bills, refurbishing your house, expanding your company, or for the wedding of your child.


Most of all, the borrower gets a high loan to value (LTV) of up to 70 per cent of the total security value. Acknowledge to the extended loan repayment time horizon, it cuts down the total monthly EMIs into smaller amounts, giving a sigh of relief to the borrower at the end of every repayment cycle. Likewise, there are myriad advantages of availing of a loan against security. Here, we have enlisted a few advantages that explain why a loan against security is a good idea.

Low-Interest Rates

As it’s a secured loan, the rate of interest is pretty low on a loan against security. Unsecured loans have high-interest rates and have more well-lined guidelines for the borrowers. The interest rate on LAS ranges as low as 7.75% per annum. In loan against security, a borrower has to pay interest only on the amount they use, the processing charges of secured loans are comparatively low than an unsecured loan.

Credit Score

Before any lender approves a loan, one of the many things they check is the credit score. credit score gives them the validation of whether you are eligible to take the credit or not. this isn’t the case with a loan against security, and most of the lenders wouldn’t consider this feature as the prime factor behind giving a loan. So, it’s an ease for most borrowers who had taken any other loan elsewhere for some purpose or had less credit score in the past.

Free To Use For Any Purpose

The sanctioned amount on loan against security can be used for any purpose. You don’t need a specific reason before you go for loan option to get financial support. Whether you are planning to buy a vehicle, provide child support or renovate your house there are no limitations or exceptions. As long as it’s not used for illegal purposes like gambling or doing drugs.



If you are looking for financial support to help you overcome your financial worries, a loan against security is the best way to get your job done in less time. The process is very fast and doesn’t take much time or lengthy documentation. All you need to have securities in demat that suffices for the loan amount you are looking for. Lower interest rates, refinancing facilities, tax exemptions, and right to occupancy are some of the benefits of availing of a loan against securities. So, if you need funds, wait no more, and go for this idea.