InvestorQ : What is the loan to value for loan against shares/securities (LAS)?
Ira Shah made post

What is the loan to value for loan against shares/securities (LAS)?

Answer
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Deepali Khupte answered.
2 years ago


Loan to value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. LTV, in simpler terms, is the maximum amount that a lender will consider loaning to you as a percentage of the value of your asset, in this case, securities.

For loan against shares or equity linked mutual funds, the loan to value (LTV) starts from 30% till 50% depending on your requirement.

The LTV for loan against debt mutual funds or bonds starts from 60% to 90% depending on the type/class of securities.

In case your margin falls below the LTV, you will have to settle the differential amount or pledge more securities within seven days, failing which your securities will be squared off.

Do note that LTV can vary across banks and non-banking finance companies. So, do read your loan document carefully before signing on the dotted line.