A loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient incurs a debt and is usually liable to pay interest on that debt until it is repaid, as well as to repay the principal amount borrowed. There are various types of loans available in the market but they can be categorized into two broad categories, i.e., secured and unsecured loans.

Loan Against Securities (LAS)

Loan Against Securities is a secured loan where you pledge your shares, mutual funds or life insurance policies as collateral to the bank against your loan amount. Loan Against Securities are typically offered as an overdraft facility in your account after you have deposited your securities. You can draw money from the account, and you pay interest only on the loan amount you use and for the period you use it.

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Loan Against Property (LAP)

Loan Against Property is a secured loan that is sanctioned against the asset pledged as collateral. This asset can either be an owned land, a house, or any other commercial premises. The asset remains as collateral with the lender until the entire Loan Against Property amount is repaid. Loan Against Property interest rates are considerably lower as compared to any unsecured loan.

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