Instant Loan Against Securities: Fast Cash Without Selling Your Investments

What Is an Instant Loan Against Securities?

An instant loan against securities (LAS) is a type of secured loan where you pledge your financial assets — such as shares, mutual funds, bonds, insurance policies, or other market-linked securities — as collateral in exchange for a line of credit or lump sum loan from a bank or non-banking financial company (NBFC). 

The best part? You continue to enjoy the benefits of those investments (like dividends or bonuses) while using the funds for your personal or business needs.

How Does It Work?

The process is relatively simple and fast, especially with digital platforms now offering instant loan approvals against securities. Here’s how it typically works:

1. Choose Your Lender: Pick a bank or NBFC that offers LAS.
2. Pledge Your Securities: Provide details of the securities you wish to pledge.
3. Loan Evaluation: The lender assesses the value and liquidity of your securities.
4. Loan Disbursement: Based on eligibility and the value of securities, the loan is disbursed — often within hours.
5. Repayment: You pay interest only on the amount used, and principal repayment is flexible depending on the agreement.

Most lenders offer a loan-to-value (LTV) ratio of 50–75% of the value of the pledged securities.

Types of Securities You Can Pledge

You can avail an instant loan against a variety of financial instruments, such as:

• Equity Shares (of listed companies)
• Mutual Funds (equity and debt schemes)
• Government Bonds
• Fixed Maturity Plans (FMPs)
• Life Insurance Policies (with surrender value)
• Exchange-Traded Funds (ETFs)

Each lender may have specific criteria for the kind of securities they accept.

Key Benefits of Instant Loan Against Securities

1. Quick Disbursal

The biggest advantage is speed. Many platforms now offer instant loans against securities, with approvals and disbursals happening within a few hours — ideal for urgent financial needs.

2. No Need to Liquidate Investments

You don’t have to sell your stocks or mutual funds in a downturn, which could result in losses. Your portfolio continues to grow, and you still enjoy dividends or bonuses.

3. Lower Interest Rates

Compared to personal loans, loans against securities typically come with lower interest rates since they are secured by assets.

4. Pay Interest Only on Used Amount

In most overdraft-type loan structures, you pay interest only on the amount withdrawn — not the sanctioned limit. This reduces your overall interest burden.

5. Flexible Repayment Options

You can choose to repay only the interest regularly and pay the principal at the end of the loan tenure. Many lenders also offer part-payment and foreclosure without heavy charges.

Who Should Consider This Loan?

An instant loan against securities is ideal for:

• Investors who need cash but don’t want to disrupt their long-term investment strategy.
• Business owners looking for working capital without complex documentation.
• Professionals or salaried individuals facing short-term cash flow issues.
• Parents who want to fund education or weddings without selling their portfolio.

Things to Keep in Mind

While this type of loan offers many advantages, here are a few things to be aware of:

• Market Volatility Risk: If the value of your securities falls significantly, the lender may ask for additional securities or partial repayment (margin call).
• Loan Limits: The loan amount depends on the type and value of securities pledged. Illiquid or volatile securities may fetch a lower loan amount.
• Ownership Restriction: While your investments are pledged, you can’t sell or switch them unless you close the loan or get lender approval.
  
  

Steps to Apply for an Instant Loan Against Securities

1. Check Eligibility: Ensure your securities are on the lender’s approved list.
2. Choose a Platform: Use online banking portals or fintech apps that offer digital loan applications.
3. Upload Documents: Basic KYC documents and proof of ownership of securities.
4. Sign Agreement: Digitally sign the loan agreement.
5. Get Funds: Funds are credited directly to your account or a credit line is made available.

Conclusion

An instant loan against securities is one of the most efficient ways to access funds during a financial crunch — all without disturbing your long-term wealth creation strategy. Whether you’re facing an emergency, expanding your business, or seizing an investment opportunity, this financial tool offers both speed and flexibility.