Loan Against Securities interest rates in 2026 range from 8% to 15% p.a. across banks and NBFCs. Bajaj Finance offers 8%–12% p.a. on loan against shares (verified from official Bajaj Finserv page, June 2026). HDFC Bank’s equity LAS IRR ranges from 8.50%–17.50% with an average of 10.52% p.a., while its debt LAS IRR averages 9.72% p.a. (as low as 6.75% for select debt instruments) these are HDFC Bank’s published Q4 FY2025-26 APR disclosures (January–March 2026); Q1 FY2026-27 figures will be released in the next quarterly disclosure. Tata Capital starts from 9.50% p.a. Interest is charged only on the amount actually withdrawn  not the entire sanctioned limit  making a loan against securities significantly cheaper than a personal loan in most real-world scenarios.

All rates sourced directly from official lender websites and verified published disclosures as of June 2026. Actual rate offered depends on security type, borrower profile, and loan amount. Always verify with the lender before applying.

What Is Loan Against Securities (LAS) And How Does It Work?

A loan against securities is a secured overdraft facility where you pledge financial assets, shares, mutual funds, bonds, or insurance policies  as collateral without selling them. The lender extends a credit limit based on a percentage of your portfolio’s market value (the LTV ratio). You draw money as needed and pay interest only on what you use, on a daily basis. Your securities remain in your name throughout and continue earning dividends, NAV appreciation, and returns.

A loan against securities is fundamentally different from every other loan product in India. Most loans require you to give something up  income documentation, a property as collateral, or the asset itself. LAS lets you borrow against value you already own while preserving that value intact.

Here is how it works step by step: You approach a bank or NBFC and identify the eligible securities you wish to pledge. The lender values your portfolio, applies the applicable LTV ratio to calculate a sanctioned credit limit, and sets up an overdraft account in your name. You draw funds from this account whenever needed  ₹50,000 today, another ₹2 lakh next week  and interest accrues daily only on the drawn amount. When you repay, interest stops immediately on the repaid portion. The tenure is typically 12 months and renewed annually.

No EMI. No fixed repayment schedule. Interest-only servicing with flexible principal repayment. This structure makes LAS one of the most cash-flow-friendly borrowing instruments available to Indian investors.

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Also Read: Types of Personal Loans in India — Compare All Options 

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What Are LAS Interest Rates in 2026?

In 2026, LAS interest rates across top Indian banks and NBFCs range from approximately 8% to 15% per annum. The RBI repo rate stands at 5.25% (unchanged at the June 5, 2026 MPC meeting) and SBI’s Base Rate was revised to 9.90% p.a. effective June 15, 2026  benchmarks that directly influence floating-rate LAS pricing across the market. Prime borrowers pledging high-quality debt securities can access rates in the 8.75%–10% band from major banks. NBFCs typically offer rates between 9.5% and 12%. Most borrowers see effective rates between 10% and 13% p.a. after accounting for processing fees and account maintenance charges.

Several factors determine the exact LAS interest rate offered to you:

• Type of security pledged: Debt mutual funds, government bonds, and insurance policies are lower-risk assets that attract better LTV ratios and lower interest rates. HDFC Bank’s disclosed debt LAS IRR averages 9.72% p.a. versus 10.52% for equity-backed LAS. Equity shares carry higher market volatility, so lenders price in a risk premium.
• Loan-to-Value ratio chosen: Borrowing at 40–45% LTV on equity shares signals lower risk to the lender and can improve your rate. Stretching to the maximum RBI-permitted 50% LTV on shares attracts a higher rate.
• Borrower credit profile: A CIBIL score of 750+ combined with stable income significantly improves rate negotiability. Bank of Baroda and SBI explicitly tie LAS rates 2026 to the borrower’s CIBIL band.
• Loan amount: Higher loan amounts (₹50 lakh and above) often attract better rates, especially at banks where relationship pricing applies.
• Fixed vs. floating: Most bank LAS facilities are floating-rate products linked to external benchmarks (Repo Rate or MCLR). NBFCs tend to offer fixed-rate structures for defined tenures.

Do You Know? The RBI cut its repo rate by a cumulative 125 basis points in 2025  from 6.50% to 5.25%  across four consecutive MPC meetings (February, April, June, and December 2025). This is the most aggressive easing cycle since 2020 and has directly brought down floating-rate LAS interest rates across banks and NBFCs. Since most bank LAS facilities are linked to external benchmarks (Repo-Linked Lending Rate or MCLR), every 25 bps cut by the RBI typically flows through to your LAS overdraft rate within one to three months. LAS borrowers who were paying 12%–14% on equity-backed facilities in early 2025 may now be paying 10%–12% on the same portfolio, a saving that runs into lakhs on larger loan amounts. The RBI has kept the repo rate unchanged at 5.25% in both the February and June 2026 MPC meetings, maintaining a neutral policy stance. The next MPC meeting is scheduled for 3–5 August 2026. 📌 Source: RBI Monetary Policy Statement, June 5, 2026  RBI.org.in | ClearTax  Repo Rate 2026

LAS Interest Rates 2026: Complete Bank-Wise Comparison

Among major Indian banks in 2026, Kotak Mahindra Bank leads on the lowest published starting rate (from 8.00% p.a., CIBIL-linked). HDFC Bank offers equity LAS with an average IRR of 10.52% p.a. and debt LAS with an average IRR of 9.72% p.a. (Q4 FY2025-26 disclosure, January–March 2026). SBI offers LAMF at 10.05%–10.25% p.a. and loan against shares at 10.50% p.a. ICICI Bank starts from 10.75% p.a. (Q4 FY2025-26 official quarterly disclosure). Axis Bank starts from 11.99% p.a.

Bank	LAS Interest Rates 2026  Verified	LTV  Equity Shares	LTV  Equity MF	LTV  Debt MF	Min. Loan	Processing Fee
Kotak Mahindra Bank	From 8.00% (CIBIL-linked; rate at branch)	Up to 50%	Up to 50%	Up to 85%	₹1 lakh	Nil–0.5% + GST
HDFC Bank	Equity IRR avg 10.52% (range 8.50%–17.50%); Debt IRR avg 9.72% (range 6.75%–13.80%); Digital Loan Against Shares flat 9.90%	Up to 50%	Up to 50%	Up to 80%	₹1 lakh (min share value ₹2L)	₹1,499 digital / ₹3,500 physical
IndusInd Bank	From 9.00%–9.50% (est.; confirm at branch)	Up to 50%	Up to 50%	Up to 80%	₹1 lakh	Up to 0.5% + GST
Punjab National Bank	From 9.00%–9.50% (est.; confirm at branch)	Up to 50%	Up to 50%	Up to 75%	₹50,000	Up to 0.5% + GST
Bank of Baroda	From 9.90% (CIBIL-linked)	Up to 50%	Up to 50%	Up to 75%	₹1 lakh	0.35%; max ₹1,000 (Baroda e-trade)
SBI	LAMF: 10.05%–10.25% p.a.; Loan Against Shares: 10.50% p.a.	Up to 50%	Up to 50% (equity/hybrid/ETF MF)	Up to 75% (debt/FMP MF)	₹25,000 (LAMF); ₹50,000 (shares)	Up to 0.5% + GST
ICICI Bank	From 10.75% (Q4 FY2025-26 official quarterly disclosure)	Up to 50%	Up to 50%	Up to 75%	₹1 lakh	Up to 1% + GST
Axis Bank	From 11.99% (official product page, June 2026)	Up to 50%–60%	Up to 50%–60%	Up to 70%–85%	₹1 lakh	0.50% or ₹2,000 (higher) + GST

Rates compiled from official lender websites, quarterly disclosures, and verified aggregator data as of June 2026. Where rates are CIBIL-linked without a specific published figure, the verified starting point is stated. Confirm exact rate at branch or RM level before applying.

HDFC Bank  Verified charges (official page, Q4 FY2025-26):

 Annual Maintenance Charge ₹1,800 + GST. Processing: ₹1,499 digital / ₹3,500 physical. TRF fee: ₹50 per transaction (digital), ₹100 (non-digital). Temporary Overdraft interest: up to 18% p.a. + taxes if drawings exceed sanctioned limit. No fee for switching fixed to floating rate. Credit report access: up to ₹50 per pull. No prepayment or foreclosure charges under the overdraft structure.

SBI LAMF  Verified specifics:

 Rate 10.05%–10.25% p.a. (floating). LTV: up to 50% for equity/hybrid/ETF MF; up to 75% for debt/FMP MF. Minimum loan ₹25,000; maximum ₹20 lakh (equity MF) / ₹5 crore (debt MF). No prepayment penalty. Covers 20 AMCs registered with CAMS. Available via YONO app and internet banking in under 10 minutes with zero documentation online. Loan against shares: 10.50% p.a.

What the data tells you: Kotak Mahindra Bank offers the most competitive published starting point, but the actual rate is relationship-priced and confirmed at branch level. HDFC Bank’s transparent IRR disclosure gives the clearest picture of realistic all-in pricing  averaging 10.52% for equity and 9.72% for debt. SBI is the strongest option for investors pledging debt mutual funds via YONO, combining a competitive rate, zero documentation, and ₹5 crore maximum on debt funds. ICICI’s Insta LAS compensates for a higher floor rate with one of the fastest fully digital application experiences. Axis Bank’s higher starting rate is offset by one of the best LTV ratios on debt MFs (up to 85%).

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Also Read: Why Personal Loan Interest Rates Have Been on a Downtrend — And What It Means for Borrowers 

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LAS Interest Rates 2026: Complete NBFC-Wise Comparison

Bajaj Finance and Tata Capital lead among NBFCs on LAS rates 2026. Bajaj Finance offers 8%–12% p.a. on loan against shares (verified from official Bajaj Finserv page, June 2026) and from 9.99% p.a. for LAMF via digital platforms (updated April 2026). Tata Capital starts from 9.50% p.a. (verified from Tata Capital official rates page). IIFL Finance does not publish a specific rate publicly  rate is disclosed only on application.

Important note on Bajaj Finance processing fee: The processing fee is up to 4.72% of loan amount (inclusive of taxes)  significantly higher than banks. However, for individual borrowers on floating rate with loan amount up to ₹5 crore, foreclosure and part-prepayment charges are nil. Factor the processing fee into total cost calculations for larger loans.

NBFC	LAS Rates 2026  Verified	LTV  Equity Shares	LTV  Equity/Hybrid MF	Max. Loan Amount	Processing Fee
Bajaj Finance	8%–12% (loan against shares, official); from 9.99% (LAMF digital, April 2026)	Up to 50%	Up to 45%–50%	₹1,000 Cr (corporate)	Up to 4.72% incl. taxes; nil prepayment for individuals on floating rate up to ₹5 Cr
Tata Capital	From 9.50% (official page verified)	Up to 50%	Up to 70%	₹40 Cr (offline)	Up to 1% + GST
L&T Finance	10.00%–13.50% (est.)	Up to 50%	Up to 60%	₹10 Cr+	Up to 1% + GST
IIFL Finance	On enquiry (not publicly disclosed)	Up to 50%	Up to 50%	₹1 Cr+	Up to 1% + GST
JM Financial	10.00%–14.00% (est.)	Up to 50%	Up to 65%	₹25 Cr+	Up to 1% + GST
Aditya Birla Finance	10.50%–14.00% (est.; HNI negotiation available)	Up to 50%	Up to 65%	₹50 Cr+ (HNI)	Up to 1% + GST

What the data tells you: Bajaj Finance at 8%–12% p.a. is the most competitively priced NBFC  matching or beating ICICI Bank and Axis Bank on rate. The processing fee up to 4.72% is the trade-off; on a ₹10 lakh loan against shares this could be up to ₹47,200  always calculate total cost, not just rate. Tata Capital at 9.50% offers the cleanest combination of rate and LTV (up to 70% on select MFs). For HNI portfolios above ₹5 crore, Aditya Birla Finance and JM Financial provide customised relationship pricing.

LAS Interest Rate Comparison vs. Personal Loan: Which Rate Wins?

Verified LAS interest rates in 2026 start from 8% p.a. (Bajaj Finance) versus personal loan rates starting from 9.99%–10.90% p.a. at the same lenders  and extending to 24%+ for less qualified profiles. The savings are not marginal  on a ₹25 lakh borrowing for 12 months, switching from a personal loan to LAS saves between ₹37,500 and ₹2.75 lakh depending on the personal loan rate. The overdraft structure means a loan against securities is even cheaper in practice because you pay interest only on what you actually draw.

Parameter	Loan Against Securities	Personal Loan
Verified Starting Rate (June 2026)	8.00% p.a. (Bajaj Finance loan against shares)	9.99% p.a. (HDFC Bank personal loan)
Interest Charged On	Amount actually withdrawn (daily)	Full disbursed amount from Day 1
Processing Fee	0.35%–4.72% (varies widely by lender)	1%–3%
Repayment Structure	Interest-only, flexible principal	Fixed EMI
Security Required	Yes (shares/MF/bonds)	No
Foreclosure Charges	Nil for most OD structures	2%–5% at most banks
Disbursal Time	2 hours (LAMF digital) to 5 days (bank)	1–7 days
Tax Benefit on Interest	Yes, if used for business (Sec 37)	No

Also Read: How to Get a Better Interest Rate on Your Personal Loan 

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Lowest LAS Rates vs. Other Secured Loans: Full Comparison

LAS interest rates (8%–13%) sit competitively against loan against property rates (from 8.99% p.a., verified Bajaj Markets June 2026). Gold loans can start cheaper but lock up your physical gold entirely. For investors with financial portfolios, a loan against securities remains the most operationally efficient secured loan available with no property valuation, no physical asset surrender, and disbursement in hours not weeks.

Parameter	Loan Against Securities	Loan Against Property	Gold Loan
Interest Rate (June 2026)	8%–13% p.a.	8.99%–13% p.a.	7.5%–24% p.a.
Processing Time	2 hours–5 days	2–4 weeks	Same day
Max LTV	50%–85%	50%–75%	65%–90%
Asset Remains Invested	Yes (financial portfolio)	Yes (property)	No (gold locked with lender)
Capital Gains Triggered	No	No	No
Foreclosure Charges	Nil–minimal	2%–4%	Nil–minimal
Ideal Borrower	Investor with portfolio	Property owner	Physical gold holder

LTV Ratio Comparison: How Much Can You Borrow Against Your Portfolio?

RBI mandates a maximum LTV of 50% on loans against listed equity shares. For equity mutual funds, RBI caps LTV at 75%. No regulatory ceiling exists for debt mutual funds  lenders use at their own discretion, typically offering 75%–85% LTV. SBI confirms up to 50% on equity/hybrid/ETF MFs and up to 75% on debt/FMP MFs. Higher LTV on debt and bond securities makes diversified portfolios significantly more borrowable than pure equity portfolios.

Security Type	RBI Regulatory Cap	Typical Bank LTV	Typical NBFC LTV
Listed Equity Shares	50%	50%	50%
Equity Mutual Funds	75%	50%–75%	45%–65%
Debt Mutual Funds	No cap	75%–85%	70%–80%
PSU Bonds / Govt. Securities	No cap	70%–80%	65%–75%
Life Insurance Policies	No cap	Up to 80%	Up to 80%
NSC / KVP	No cap	Up to 70%–85% (HDFC Bank)	Varies
PSU Navratna Bonds	No cap	60%–75% (HDFC Bank)	Varies
Sovereign Gold Bonds	No cap	70%–75%	65%–70%

Practical example: An investor with ₹1 crore split as ₹60 lakh equity MF and ₹40 lakh debt MF can access approximately ₹30 lakh (equity at 50% LTV) + ₹30–34 lakh (debt at 75–85% LTV) = ₹60–64 lakh total, without selling a single unit.

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Also Read: Understanding Loan-to-Value Ratio (LTV) and Why It Matters for Your Loan 

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Which Securities Are Eligible for Lowest LAS Rates?

Eligible securities for the lowest LAS rates include listed equity shares (Group I/large-cap on the lender’s approved scrip list  Bajaj Finance covers 1,000+ approved stocks), open-ended equity and debt mutual funds (non-ELSS), ETFs, government securities, PSU bonds, life insurance policies, NSC, KVP, and Sovereign Gold Bonds. ELSS units within the 3-year lock-in and closed-ended funds are not eligible at any lender. SBI’s online LAMF covers 20 AMCs registered with CAMS. HDFC Bank’s Digital LAMF requires CAMS-registered folios in single name.

Lenders maintain their own approved lists, reviewed periodically. A scrip eligible at HDFC Bank may not appear on Bajaj Finance’s approved list. Always verify your specific holdings against your chosen lender’s current approved securities list before applying; this is the single most common source of application delays.

Highest LTV securities to pledge first (in order):

1. Debt mutual funds (75%–85% LTV)
2. Life insurance policies  surrender value basis (up to 80%)
3. NSC / KVP (up to 70%–85% at HDFC Bank)
4. Government securities / PSU Navratna Bonds (60%–80%)
5. Equity mutual funds (50%–75%)
6. Listed equity shares (maximum 50%)

Do You Know? The RBI issued the Commercial Banks – Credit Facilities Amendment Directions, 2026 on February 13, 2026, effective April 1, 2026 the most significant overhaul of loan against securities regulations in years. The new framework introduced structured LTV ceilings: 60% for listed shares (up from the earlier individual bank discretion), 75% for equity mutual funds, REITs, and InvITs, and 85% for AAA-rated debt securities. It also introduced a ₹1 crore per-individual cap on loans against eligible securities (outside specific categories), revised IPO financing limits to ₹25 lakh per individual with a 25% minimum margin, and mandated that all credit to stockbrokers and capital market intermediaries must now be 100% collateralised with no bank funding permitted for proprietary trading. For retail LAS borrowers, the practical impact is a more transparent, better-defined borrowing framework with clearer LTV limits and stronger borrower protections. 📌 Source: RBI Amendment Directions 2026  TaxGuru (Full Circular) | IndMoney  RBI New Credit Rules for Brokers 2026 | RBI Official Notification

How Loan Against Securities Pledging Works: Shares and Mutual Funds

Pledging shares requires a Pledge Request Form submitted through your Depository Participant (NSDL/CDSL). For mutual funds, a lien is created with the RTA (CAMS or KFintech) on your folio. Both processes are increasingly digital. The lender then sets up an overdraft account with a credit limit based on the LTV of your pledged assets. You draw funds as needed and repay flexibly.

Share Pledging  Step by Step

Step 1: Identify eligible shares from your demat account and cross-check against the lender’s approved scrip list. HDFC Bank requires approved shares valued at ₹2 lakh and above for its Digital Loan Against Shares.

Step 2: Submit a Pledge Request Form (PRF) to your Depository Participant. For shares with more than 20 ISINs, additional annexures are required. Bajaj Finance charges up to ₹59 per ISIN for pledge confirmation.

Step 3: The lender creates a pledge on your demat holdings. You remain the beneficial owner, dividends, bonuses, and rights continue to accrue to you throughout.

Step 4: Based on the current market value of your approved scrips and the applicable 50% LTV, a credit limit is sanctioned.

Step 5: An overdraft account is set up. Funds are available for drawdown immediately.

Step 6: Interest accrues daily only on the amount drawn. Repay flexibly  there is no fixed EMI.

Step 7: On full repayment, the pledge is released and your demat holdings return to normal unrestricted status.

Mutual Fund Pledging  Step by Step

Step 1: Identify the mutual fund schemes you wish to pledge. HDFC Bank’s Digital LAMF requires CAMS-registered folios in single name. SBI’s LAMF covers 20 AMCs registered with CAMS.

Step 2: A lien is created on your fund units with the RTA. For demat-held units, the process runs through NSDL/CDSL.

Step 3: No broker is required  this makes mutual fund pledging faster and simpler than share pledging.

Step 4: The sanctioned overdraft limit is calculated based on the current NAV of pledged units and the applicable LTV. This limit updates daily as NAV changes  upward revaluation automatically increases your drawdown limit.

Step 5: Funds are disbursed to your linked bank account  as quickly as 2 working hours on digital LAMF platforms (Bajaj Finance via smallcase, updated April 2026), within 24–48 hours at Bajaj Finance directly, and under 10 minutes via SBI YONO app.

Margin Call on Loan Against Securities: What Every Borrower Must Know

If the market value of your pledged securities drops, your outstanding loan may exceed the permitted LTV threshold, triggering a margin call. The lender asks you to pledge more securities or repay part of the loan  typically within 1–7 working days depending on the lender. If you don’t respond, the lender sells enough of your pledged assets to restore the required LTV. You bear any market losses from that forced sale.

Concrete example: You pledge ₹20 lakh in equity mutual funds and draw ₹10 lakh at 50% LTV. Three weeks later, a market correction drops your pledged portfolio value to ₹17 lakh. Your ₹10 lakh outstanding now represents 58.8% LTV  well above the 50% cap. Your lender issues a margin call requesting you to either pledge additional units worth approximately ₹3 lakh or repay around ₹1.5 lakh to bring LTV back to 50%.

If you ignore the margin call for the stipulated period, the lender sells mutual fund units from your pledged folio to recover the shortfall  at whatever NAV the market is offering that day. Bajaj Finance’s penal charge for delayed repayment is 18% p.a. per instalment from the due date.

How to protect yourself from margin calls: Borrow conservatively  target 35%–40% LTV on equity securities rather than the maximum 50%. This gives a 10–15% market correction buffer before a margin call triggers. Keep a cash reserve equivalent to 10%–15% of your drawn loan amount ready for quick top-ups during volatile periods. Diversify your pledged portfolio across equity, debt, and bonds  debt funds are far less volatile and rarely trigger margin calls. Monitor your portfolio actively during periods of heightened market volatility.

Real Cost of LAS Interest Rates: What You Will Actually Pay

Examples assume overdraft structure at 10.5% p.a.  interest charged daily on drawn amount only. Processing fee 0.5%. Annual maintenance charge ₹2,000.

₹10 Lakh Loan Against Securities  12 Months

Component	Amount
Amount Drawn	₹10,00,000
Interest @ 10.5% p.a.	₹1,05,000
Processing Fee (0.5%)	₹5,000
Annual Maintenance Charge	₹2,000
Total Real Cost	₹1,12,000
Equivalent Personal Loan @ 15% p.a.	₹1,57,000
Interest Saving vs. Personal Loan	₹45,000

₹25 Lakh Loan Against Securities  12 Months

Component	Amount
Amount Drawn	₹25,00,000
Interest @ 10.5% p.a.	₹2,62,500
Processing Fee (0.5%)	₹12,500
Annual Maintenance Charge	₹2,000
Total Real Cost	₹2,77,000
Equivalent Personal Loan @ 16% p.a.	₹4,16,000
Interest Saving vs. Personal Loan	₹1,39,000

₹50 Lakh Loan Against Securities  12 Months

Component	Amount
Amount Drawn	₹50,00,000
Interest @ 10.5% p.a.	₹5,25,000
Processing Fee (0.5%)	₹25,000
Annual Maintenance Charge	₹2,500
Total Real Cost	₹5,52,500
Equivalent Business Loan @ 14% p.a.	₹7,27,500
Interest Saving vs. Business Loan	₹1,75,000

₹1 Crore Loan Against Securities  12 Months

Component	Amount
Amount Drawn	₹1,00,00,000
Interest @ 9.72% p.a. (HDFC Bank avg debt LAS IRR, Q4 FY2025-26)	₹9,72,000
Processing Fee (₹1,499 digital  HDFC Bank)	₹1,499
Annual Maintenance Charge (₹1,800 + GST)	₹2,124
Total Real Cost	₹9,75,623
Equivalent Business Loan @ 14% p.a.	₹14,00,000
Interest Saving vs. Business Loan	₹4,24,377

Note: If you draw only 60% of the sanctioned limit on average across the year, your interest cost falls proportionally; the overdraft structure rewards disciplined utilisation.

Hidden Charges on LAS: What to Check Before Signing

Beyond the headline LAS interest rate, a loan against securities involves annual maintenance charges, pledge transaction fees, penal interest for margin call breaches, temporary overdraft interest if you exceed the limit, and pledge confirmation charges per ISIN. HDFC Bank charges ₹1,800 + GST as annual maintenance and up to 18% p.a. + taxes for drawings exceeding the sanctioned limit. Bajaj Finance’s processing fee goes up to 4.72% of loan amount (inclusive of taxes), penal charge for delayed payment is 18% p.a. per instalment, and bounce charges are ₹1,200 per instance.

Charge Head	Verified Details	What to Watch
Processing Fee	HDFC Bank: ₹1,499 digital / ₹3,500 physical; BoB: 0.35% max ₹1,000 (e-trade); Axis: 0.50% or ₹2,000 (higher); Bajaj Finance: up to 4.72% incl. taxes	Bajaj Finance fee is significantly higher than banks  calculate total cost before applying
Annual Maintenance Charge	HDFC Bank: ₹1,800 + GST (verified); others: ₹1,000–₹2,500	HDFC AMC confirmed; ask other lenders upfront
Pledge Confirmation Charges	Bajaj Finance: up to ₹59 per ISIN	Adds up for multi-scrip pledges
TRF / Pledge Transaction Fee	HDFC Bank: ₹50 per TRF (digital) / ₹100 (non-digital)	Ask specifically  rarely disclosed upfront
Penal Interest	HDFC Bank: up to 18% p.a. + taxes on excess drawings; Bajaj Finance: 18% p.a. on delayed instalments	High penal rates  maintain sufficient balance
Bounce Charges	Bajaj Finance: ₹1,200 per bounce	Factor in for auto-debit mandates
Foreclosure / Prepayment	HDFC Bank: nil (OD structure); Bajaj Finance: nil for individuals on floating rate up to ₹5 Cr	Verify  term LAS products may carry charges
Credit Report Access Fee	HDFC Bank: up to ₹50 per pull	Minor but worth knowing
Default / Legal Charges	All lenders: actual costs incurred	Non-refundable; incurred during forced liquidation

LAS Tax Benefits: Does Loan Against Securities Save Tax?

Pledging securities for a loan against securities does not trigger capital gains tax; it is not a sale or transfer. No STCG or LTCG applies. However, interest paid on LAS does not qualify for tax benefits for personal use; this is explicitly confirmed in verified lender FAQs including smallcase’s LAMF FAQ. If LAS proceeds are used for business purposes, the interest paid may be deductible under Section 37(1) of the Income Tax Act. Consult a chartered accountant for guidance specific to your end-use.

This tax neutrality is one of LAS’s most underappreciated advantages. Consider a salaried investor in the 30% tax bracket who holds ₹30 lakh in equity shares with ₹10 lakh in embedded long-term capital gains. Selling those shares to meet a ₹10 lakh need would cost approximately ₹1.09 lakh in LTCG tax (12.5% on taxable gains above the ₹1.25 lakh exemption threshold). Taking a loan against securities at HDFC Bank’s average equity IRR of 10.52% costs approximately ₹1.05 lakh in interest for 12 months  while the portfolio continues growing. The tax saving alone nearly covers the entire annual borrowing cost.

For business owners using LAS proceeds for working capital and deducting the interest in the 30% tax bracket, the effective cost of borrowing at 10.5% drops to approximately 7.35% post-tax  among the cheapest business funding available in India.

Should You Sell Shares or Take LAS? The Investor Decision Framework

For short-to-medium-term liquidity needs (3–18 months), a loan against securities is almost always preferable to selling, provided your LAS interest rate is lower than your portfolio’s expected return. If your equity portfolio historically returns 12%+ annually and your LAS rate is 8%–10.5% depending on the lender, you are financially ahead by borrowing rather than selling  particularly after factoring in capital gains tax on the sale.

Take LAS if:

• You need liquidity for a defined, time-bound purpose (6–18 months)
• You have a diversified portfolio with significant embedded gains (selling would be tax-costly)
• Your expected portfolio return exceeds your LAS interest rate
• You can comfortably service interest from income and maintain a margin buffer
• You are funding a business need where interest may be tax-deductible

Do NOT take LAS if:

• Your portfolio is entirely in highly volatile small-cap or mid-cap stocks (margin call risk is elevated)
• You have no clarity on repayment  LAS is not a permanent solution to cash flow problems
• You plan to use LAS proceeds for stock market speculation (explicitly prohibited by RBI and all lenders)
• You are nearing retirement and cannot withstand forced liquidation of pledged assets
• Your portfolio is concentrated in 1–2 scrips with no diversification

When Loan Against Securities Becomes Risky

• LAS becomes dangerous when borrowers take maximum LTV against concentrated volatile portfolios, have no plan for margin calls, or use the funds for further market speculation.
• Concentrated equity portfolio + maximum LTV: An investor pledges ₹20 lakh of a single mid-cap stock at 50% LTV, drawing ₹10 lakh. A 35% correction reduces the portfolio value to ₹13 lakh  triggering a margin call requiring immediate action. If the investor cannot arrange funds within the stipulated period, the lender sells at the bottom of the correction, locking in permanent losses.
• Treating LAS as a budget substitute: LAS is an overdraft. If you draw the full ₹10 lakh and service only the interest (₹1.05 lakh/year at 10.5%) without a clear plan to repay the principal, the outstanding balance sits at ₹10 lakh indefinitely. Over three years, you have paid ₹3.15 lakh in interest and still owe ₹10 lakh.
• Leveraged investing: Pledging your existing equity portfolio to raise funds and then buying more equities is double leverage. HDFC Bank, SBI, and all regulated lenders explicitly prohibit use of loan against securities proceeds for capital market speculation or secondary market share purchases. Violation triggers immediate loan recall.

LAS Approval Checklist: What You Need to Apply

• Demat account in your own name (single holder) with NSDL or CDSL
• Mutual fund folios registered with CAMS (HDFC Bank digital LAMF requires CAMS; SBI LAMF covers 20 CAMS-registered AMCs)
• CIBIL or Experian credit score of 700+ (750+ for best rates)
• PAN card, Aadhaar / OVD for KYC
• For Bajaj Finance digital: only PAN + proof of identity and address required
• For HDFC Bank digital LAS: HDFC savings account + NetBanking access mandatory
• Latest 3–6 months bank statements (some banks require; most NBFCs waive)
• ITR for last 1–2 years (some banks for larger amounts; not required for SBI LAMF online or Bajaj Finance digital)
• Current portfolio holding statement (demat or MF folio statement)
• Verified that your specific scrips/funds appear on the lender’s current approved securities list
• Estimate of how much you need vs. how much LTV your portfolio qualifies for

Compare LAS Interest Rates, Then Apply The Right LAS Rate Can Save You Lakhs

A difference of 1.5% in LAS interest rates on ₹25 lakh for 12 months works out to ₹37,500 in additional interest cost. On ₹1 crore for 18 months, it represents over ₹2.25 lakh. The gap between the lowest LAS rates available (Bajaj Finance at 8%) and higher published rates (Axis Bank at 11.99%) on ₹50 lakh represents nearly ₹2 lakh in annual interest difference, a sum that dwarfs even Bajaj Finance’s higher processing fee on that loan size.

With 275+ banks and NBFCs on its platform, over 25 years of lending expertise across 4,000+ cities, and ₹1.4 lakh crore disbursed, Ruloans is India’s leading financial distribution company  giving you structured access to the best LAS offers available. Through the Ruconnect App, India’s first B2B loan distribution channel partner app, you as a loan seeker can run instant eligibility checks, compare real-time offers from 275+ lenders, and guide you to the most cost-effective LAS interest rate structure for your portfolio. Comparing lenders through a platform like Ruloans takes minutes and can save you lakhs over the tenure of the loan.

Conclusion: 

A loan against securities is India’s most tax-efficient, cost-effective liquidity tool for investors in 2026. Verified LAS interest rates range from 8%–12% p.a. at Bajaj Finance, 9.50% at Tata Capital, 9.72%–10.52% average IRR at HDFC Bank (Q4 FY2025-26), 10.05%–10.50% at SBI, 10.75% at ICICI Bank, and 11.99% at Axis Bank. On ₹50 lakh for 18 months, choosing the right lender after a proper LAS interest rate comparison can mean over ₹2 lakh in savings.

The overdraft structure means you pay only on what you draw. No capital gains tax. No broken compounding. No lost dividends.

Rates sourced from official lender websites and published disclosures as of June 2026. HDFC Bank IRR figures are Q4 FY2025-26 (January–March 2026) APR disclosures. Subject to change. For informational purposes only.

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