Know the Benefits and Features of Loan Against Securities

Loan Against Securities (LAS) is a borrowed sum provided by banks and NBFCs against the shares in which you have invested. LAS can be offered by banks and NBFCs against listed securities like bonds, policies or stocks. Such a loan can be availed as an overdraft facility against the securities that the borrower has pledged to invest – as these securities serve as collateral against LAS. NBFCs like Bajaj Finserv offer LAS up to 10 Crores at attractive interest rates, and you can easily apply for the loan online.
It is an excellent way to fund a sudden cash crunch by pledging some of your shares to the lending institution. When you need some urgent money, you can choose a term loan offered by Bajaj Finserv which has a tenor of 3, 6, 9, or 12 months. However, you can also opt for a tenor of your choice by opting for Flexi Loans.

How does Loan Against Securities (LAS) Work?

Loan Against Securities (LAS) works on the concept of pledging under which you sign an agreement of loan with your lending institution. The loan agreement is an undertaking that you are giving some shares in its favour. From now, the lending institution holds all the powers to own all these shares if you won’t be able to pay back the loan on time. However, until that time you don’t lose the ownership of these shares. You will still be able to avail all the benefits as an owner of those shares.

The borrowers who fall under the eligibility criteria for Loan against securities are traders, businessmen, and industrialists. Apart from being an Indian Citizen, you must have completed 21 years at the time of sanctioning the loan. A regular source of income apart from owning a minimum value of 10 Lakh of shares is mandatory. While applying for LAS, the critical documents you would need are – your address and identity proofs, verified reports of the securities/shares you own, and a passport sized photograph.

When you apply online for LAS a minimal processing fee is charged at 0.10% – 1% of the amount of loan. There are no fees for the loan statement, interest and principal statement. However, if an EMI bounces, there is a fee of Rs. 1000 for very default.

Loan against securities


Features and Benefits of Loan Against Securities (LAS)

Bajaj Finserv offers loans against many types of securities. These include – Loan Against Shares, Bonds, Mutual Funds, Insurance Policies, Fixed Maturity Plans (FMPs), Initial Public Offering (IPO) and Employee Stock Ownership Plan (ESOP) financing.

The tenor for ESOP financing ranges from 30 to 180 days, and its margin ranges anywhere between 30% to 40%. However, there are some fees charged for interest rates, processing, for opening a Demat account, AMC and documentation.

One of the crucial features of Loan Against Securities is you can repay the loan as per your ease. There are no fees for part-payment and foreclosure. Hence, it serves as a convenient option to fund all your financial needs.

A Relationship Manager is at your service every time to deal with all your complaints, issues, and queries. While repaying back the loan, you can pay it anytime through RTGS, NEFT, or Cheque. Bajaj Finserv has a customer portal, Experia which is dedicated to managing the repayment of your loans.

You can also pay the loan back through the sale of securities which have been allotted through Bajaj Finserv. You can also retain all the amount which covers the amount of credit you have purchased. The remaining amount will get credited to the beneficiary’s account along with interest. The pledging of shares will be released, and securities will be transferred to the beneficiary.

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