There are several moments in life, like a personal exigency, an unexpected medical requirement or an attractive business opportunity where you require a quick inflow of funds. Amongst numerous alternatives, one attractive alternative to help you cushion yourself to obtain instant liquidity is Loan Against Securities (LAS). Loan against securities is an overdraft facility where you can use your investments as collateral to avail a loan. You can use a variety of investments as collateral including bank deposits, equity shares, mutual funds, bonds, insurance policies, national savings certificates, IPO financing, ESOP financing, etc.

Once the loan is sanctioned, the loan amount is transferred into an overdraft account of the borrower and is withdrawn as per need. This loan alternative offers numerous benefits to the borrower: retain the benefits of being a shareholder, the interest rate is low and charged only on daily basis on balance amount in the account, flexible withdrawals and repayments, high loan amount, and so on. Let us look at the most important documents that you will be required to submit in your application for a loan against security-

For a salaried employee, the following documents are required:

  • PAN Card
  • Aadhaar Card
  • Identity Proof (birth certificate, 10th mark sheet, passport, etc.)
  • Address Proof (birth certificate, passport, etc.)
  • Income Proof (Salary slips)
  • ITR Returns filed for last 2-3 years
  • Passport size photographs
  • Bank statements for last 6 months
  • Cancelled cheque
  • Investment holding proof
  • Demat Account statements

For a self-employed individual, the following documents are required:

  • PAN Card
  • Aadhaar Card
  • Identity proof (birth certificate, 10th mark sheet, passport, etc.)
  • Address proof (birth certificate, passport, etc.)
  • Income proof (Salary slips)
  • ITR Returns filed for last 2-3 years
  • Passport size photographs
  • Bank statements for last 6 months
  • Cancelled cheque
  • Investment holding proof
  • Demat account statements
  • Balance Sheet and P/L Statements for the last 2-3 years
  • Office address proof

Before submitting the above-mentioned documents, certain eligibility criteria also need to be met by borrowers before applying for a loan against securities in India:

  • Individuals, Companies/Firms, HUFs, Private and Public Ltd. companies can apply
  • Indian residents can apply
  • Applicants between the age of 18 and 65 (generally) can apply
  • Holders of approved investment holdings can apply
  • The investment holdings should be fully paid for and not in the lock-in period
  • A net worth of minimum Rs. 2 lakhs

Loan against securities allows you to take care of your financial needs with a secured short-term loan, without compromising your future planning and investments. With numerous advantages and easy terms and conditions, this serves as one of the most attractive loan alternatives if you’re an investor. Enjoy low-interest rates, options to swap securities, zero pre-closure charges and easy and quick processing of your LAS with Tata Capital.

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