Loan Against Securities: What are they and why are they beneficial?

4 MinsFeb 07, 2023

Financial inconsistencies - business upheavals, urgent loan repayments, medical emergencies, financial commitments, etc. - can destabilize your routine, peaceful life. Most individuals dip into their savings and investments. However, using your hard-earned money for a temporary financial crisis is not wise.

Loan Against Securities: What are they and why are they beneficial?

Financial institutions provide solutions such as Loan Against Securities (LAS) to mitigate such scenarios by providing the required financial assistance while securing your investments. It is considered a safe loan with the benefits of both worlds: secured and unsecured loans.

Difference Between Secured and Unsecure Loans -

Points of ComparisonSecuredUnsecured
Need for collateralRequires collateral for securing the loan.Does not require collateral to secure their loan.
  • The interest rates are lower
  • A higher loan amount based on the collateral
  • The loan application process is simple and easy, and the approval is almost instant.
  • The processing fees are comparatively lesser.
  • The loan approval and disbursal processes are slightly time-consuming
  • The processing fees are higher
  • Available at a higher interest rate.
  • Restricted to a certain limit and do not provide a higher loan amount.
Common examplesHome loans, gold loans, etc., are examples of secured loans.Personal Loans are one of the most common unsecured loans.

What is a Loan Against Securities (LAS)?

A loan against securities is a secured loan wherein you can avail of a loan against your securities, refraining from selling them during an emergency.

With LAS, you get instant funds to mitigate the financial emergency while safeguarding your investment and avoiding the loss of any potential gains. The applicable loan amount is based on the type, and extent of securities pledged.

Why is Loan Against Securities considered a benefit of both worlds?

A few characteristics of LAS reinstate its effectiveness as a perfect median between secured and unsecured loans.

  • Lower interest rates - The loan against securities interest rates are lower compared to unsecured loans as the loan is secured. It is based on the loan amount borrowed. There is a limit on the amount that can be borrowed, which is revised based on the current value of the securities.
  • Simple and quick process - As the loan is based on the securities and their value, the income proof does not determine the eligibility, making the process simple and easy, enabling the loan to be disbursed in just three minutes!
    In case of unsecured loans, getting high loan amount isn't easy unless you have an impeccable CIBIL score and source of income. But in case of LAS, a nominal CIBIL score of 650 can also do the work when it is backed by your invested securities. You can avail a loan of up to 1 Cr in just 3 mins.

Also Read: [Best Loan Against Securities Option Suitable for You]

Axis Bank provides a high value for a loan against securities right at your doorstep with LAS 24x7. You can pledge a slew of bank-approved securities, including mutual funds, shares, bonds, etc., and get up to ₹1 crore (conditions apply) instant loan to manage any financial emergencies.

We provide up to 85% value of your total securities. In addition, you have the flexibility to repay the loan at any time. There are no foreclosure charges, and it offers attractive interest rates as low as 9.99%.

The process for the LAS 24x7 application is:

  • Sign in to your mobile banking or net banking application.
  • Choose the securities and units that you want to put up as collateral.
  • Select the fees, authorization and account to pay with.
  • Enter the OTP and confirm the loan.

And with these quick and easy steps, the amount will be transferred to your selected bank account.

At Axis Bank, we understand your need for quick financial resolution during emergencies. Our fast delivery with a quick, online, zero documentation, OTP-based and seamless process assures you of much-needed financial assistance in need.

Our 24x7 LAS provides lower interest rates like secured loans and is available based on a simple process like unsecured loans, making it the best of both worlds. Apply today!

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.