What is Loan against Securities (LAS)?

As can be understood from its name, loan against securities (LAS) is a loan a lender gives you against securities held by you. Like in a home loan, your home is the collateral, in a LAS, your securities are collateral held by the lender. Loan against securities is also commonly called loan against shares.

Let’s understand what securities are:

A security is any financial asset that is tradeable. It commonly refers to any form of financial instrument such as stocks, bonds and debentures, forwards, futures, options, swaps, etc.

In other words, loan against security (LAS) is a loan advance that a lender gives to a customer against a pledge of security. It can be loan against insurance policy, mutual funds, National Savings Certificate and other securities.

Here are the other securities against which one can get a loan:

• Insurance policies
• Non-convertible debentures (NCDs)
• NABARD Bonds
• UTI Bonds
• Mutual fund units
• Demat shares
• National Savings Certificate or KVP, these are accepted in demat form only.