WHAT IS LOAN AGAINST SECURITY?

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                  By-Saqib Ali

WHAT IS LOAN AGAINST SECURITY?

Nowdays Loan Against Security, (L.A.S) is easily available with minimal requirement of documents. when it comes to loans, No loan is better than Loan Against Security.(L.A.S)

But, do you really know about this loan?

let's see

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1. What is Loan Against Security

Loan Against Security, you can take loan form bank against any type of security. 

L.A.S, as the name suggests, is a form where individuals or companies pledge their securities. such as shares, mutual funds, and insurance policies as collateral to obtain a loan.

Now, let's take a closer look at what securities can be. 

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2. Securities :

(i) Stocks (Ownership shares in companies)

(ii) Bonds (Dept securities with interest and payment)

(iii) Derivatives (Contracts based on assets)

(iv) ETFs (Index-tracking securities)

(v) Mutual funds (Diversified managed investments)

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3. Eligibility Criteria for Loan Against Securities

• Applicants must be Indian

    residents.

• Age: minimum 18 years and. 

  maximum 70 years. 

• Salaried or self-employed 

  individuals are eligible.

• Must have approved 

  securities to pledge. 

• No previous default with any.  

  financial Institution.

• No past criminal background. 

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4. Documents required

• Duly filled application and 

   loan agreement

• Passport-sized photographs

• KYC documents:

a. Passport 

b. Driving License 

c. Voter's Identity card

d. Aadhaar

e. Job Card issued by NREGA

f. Letter issued by the National 

   Population Register

• PAN Card

• Demat Holding Statement

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5. Tenure and Rate of Interest

Generally, Loan Against 

Securities comes with lower interest rates compared to unsecured loans.

It is a more affordable borrowing option, although it has a variety of charges. Brokers usually charge more than banks

Up to 12%. 

You may get 12% interest rate somewhere and 11% interest rate somewhere else. 

It depends, where you are going to apply for (LAS)

The interest rate of, most of the banks is same from 9% to 12%, It depends on you how much loan you want to take and the tenure you decide.

Although LAS is basically for 36 months, it can be changed according to your requirements.