A loan against securities (LAS) lets you pledge the stocks and mutual funds lying in your demat account to borrow money without selling your investments. It works much like a loan against gold or property: the holdings stay yours, and you get liquidity against them.
The securities are pledged to Zerodha Capital Private Limited (ZCPL), a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India.
Key features
The entire application process is online.
The minimum loan amount is Rs. 25,000 and the maximum is Rs. 10 crore.
The maximum loan tenure is 3 years.
Only interest is due every month. The principal can be repaid any time before the tenure ends.
Multiple top-up loans can be availed within your sanction limit, with a minimum top-up of Rs. 2,500.
The loan amount is credited to your bank account within one working day.
A flat annualised interest rate based on your loan amount, with no hidden charges.
A haircut of 55% on pledged securities, which reduces how often you receive shortfall notifications or margin calls.
A dashboard to manage the loan, and a large list of approved securities.
These terms are subject to change from time to time.