Loan Against Security
A LAS Loan Against Security is a type of Loan where you pledge Financial assets such as stocks, mutual funds, bonds, or insurance policies as collateral to secure a Loan from a Bank or Financial institution. The lender provides a Loan amount based on the value of the pledged securities, and you continue to earn dividends or interest on them while repaying the Loan.
#Key Features of Loan Against Security (LAS):
1.Collateral-Based Loan – The Loan is secured against your Financial assets.
2.Lower Interest Rates – Compared to unsecured Loans, LAS usually has lower interest rates.
3.Quick Processing – Since the Loan is secured, the approval process is faster.
4.No Asset Liquidation – You don’t have to sell your securities to raise funds.
5.Flexible Repayment Options – Many lenders offer interest-only EMIs or bullet repayment options.
6.Loan Limit – The Loan amount is typically a percentage (50-80%) of the market value of the pledged security.
#Types of Securities You Can Pledge:
•Shares/Stocks (from approved companies)
•Mutual Funds (both debt and equity)
•Government Bond
•Fixed Deposits (with the same Bank)
•Insurance Policies (with surrender value)
Risks Involved:
•Market Fluctuations – If the value of pledged securities falls, the lender may ask for additional collateral or partial repayment.
•Margin Calls – If the security value drops significantly, the lender can sell your securities to recover the Loan.
•Interest Costs – While lower than unsecured Loans, interest rates can still be a Financial burden.
LAS from Kotak Mahindra B
ank
Kotak Mahindra Bank offers a Loan Against Securities (LAS), allowing you to leverage your Financial assets to access funds without selling them. This facility is structured as an overdraft, meaning you pay interest only on the amount you utilize.
Key Features of Kotak Mahindra Bank’s LAS
✅ Overdraft Facility – Withdraw funds as needed; interest applies only to the used amount.
✅ Competitive Interest Rates – Lower than unsecured Loans.
✅ Flexible Repayment – Pay interest only or opt for structured repayments.
✅ No Need to Liquidate Assets – Continue earning dividends/interest on your pledged securities.
✅ Quick Processing – Faster approvals compared to traditional Loans.
Eligible Securities for LAS
• Equity Shares (from approved companies)
• Mutual Funds (Equity & Debt)
• Bonds & Debentures (Government & Corporate)
• Life Insurance Policies (with surrender value)
• Fixed Deposits (with Kotak Mahindra Bank)
Loan-to-Value (LTV) Ratio
The Loan amount is based on a percentage of the pledged asset value:
• Equity Mutual Funds: Up to 50% of NAV
• Debt Mutual Funds: Up to 85% of NAV
Eligibility & Documents Required
• Eligibility: Indian residents, aged 18-65, with eligible securities.
• Documents:
• PAN & Aadhaar
• Latest Bank Statements
• IT Returns (for high-value Loans)
• Statement of pledged securities
• Client Master List (for Demat accounts)
How to Apply ?
1. Visit a Kotak Mahindra Bank Branch or apply online.
2. Submit required documents along with the LAS application.
3. Approval & Disbursement – The overdraft is set up based on your securities’ value.
Riya Chourasiya
FinTech Team
Fintech Startup
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