Currently, when people are well informed about various types of loans such as personal, business, educational loans, etc., loaning against securities is still a less known option. Loan against securities scheme, also known as the LAS scheme, is a popular practice whereby an investor can pledge securities in his / her portfolio to a bank to make use of funds.
Fast all private banks and PSUs are offering such loans. The loan shall be granted if an investor pledges his / her shares to a bank. The list of approved securities against which LAS can be granted varies from bank to bank. Banks have already started to increase the financial reserves which can be required for this alternative.
The following securities can primarily be pledged for a loan:
• Demat Shares
• Mutual Funds Units
• Fixed Maturity Plans (FMP)
• Exchange Traded Funds (ETF)
• Insurance Policies
• Savings Bonds
• Government Securities