Hi, I was looking to take LAS from Zerodha or ICICI/Kotak. Zerodha’s processes are better integrated, giving smoother experience to the customer.
While comparing I got a doubt, Unlike banks, Zerodha is offering demand loan. I am not very sure what demand loans are but a quick google search tells - in demand loan lender can ask the borrower to repay the entire loan amount anytime. Can that happen in Zerodha LAS ? If yes, how many days borrower gets to repay principal + interest ?
Thank you, glad you liked it 
LAS as a product is a demand loan with a maximum tenure of 1 year. Demand loan because the pledged securities are market liked, and as per RBI’s direction, a 50% LTV is to be maintained for an active LAS loan. Given that its market-linked, the securities value can drop anytime, and the client is required to either repay the loan or pledge more securities to maintain the LTV of 50%. If the client does neither, the NBFC can liquidate your securities to compensate for the shortfall.
This won’t be possible if it’s a term loan. I’d suggest you check our FAQs for more details.
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Any ETA on this. We are waiting for this since an years.
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Hi @RS6006, actually we are beta testing this internally and unfortunately cannot give you an ETA on this at present but we will launch the feature as soon as possible. We appreciate your patience in this regard.
We are now live with loans against securities (Mutual funds).
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@Karthik Does LAS provide us with a OD account or is the whole amount instantly transferred to the bank account?
Hey Yash,
The loan amount is credited to your bank account within 2 working days.
You can also check out the FAQ section by visiting Loans – Zerodha
Why is the approved list so narrow? Why don’t you allow value funds? ICICI value fund has been around for more than 20 years but it’s still not part of the list. SBI contra also doesn’t cut it. Similarly, you don’t allow to pledge US TOTAL Stock market which is relatively less risky than nifty and nasdaq-100. What is the logic of allowing the risky Nasdaq 100 witch only 100 stocks while banning US TOTAL that has more than 3 k stocks?
Hi @Niranjan_Krishnamurt, We do not allow US stocks to be pledged for LAS. As far as the MF list is concerned, we have just started with MFs for LAS and we will soon add more mutual funds to the list.
Sorry, if I was not clear. What I meant was that you are allowing to pledge “MOTILAL OSWAL NASDAQ 100 FUND OF FUND - DIRECT GROWTH” which invests in Nasdaq 100 etf, which in turn invests in 100 stocks listed on Nasdaq. This tends to be very risky for the investor because nasdaq has a heavy tech bias and also fewer stocks in its portfolio.
Compared to that “Navi US Total Stock Market Fund of Fund” invests in VTI ETF which contains 3900 stocks and has $290 billion in AUM. It’s considered the gold standard when it comes to ETFs in the US and the least risky of ETFs. It also tends to fluctuate way less than Nasdaq. So it’s less risky to own and pledge as its value won’t drop by a large margin. Right now, this is not allowed in the list of securities. Hope you can add it to the list.
Same with Value funds like ICICI value discovery. They have low p/e ratios so they won’t fluctuate a lot compared to small caps, which again makes it less risky to own and pledge. Hope you can add these two low-risk funds to the list. Thank you!
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Thank you so much for the valuable feedback. We have recently started LAS for Mutual Funds and we will be expanding the approved list of securities soon until then we request you to kindly wait. We appreciate your patience and cooperation in this regard. Apologies for the delay in response.
Hi @MSDGOES,
If you want to apply for LAS through Zerodha NBFC then you need to have securities in your Zerodha Demat account. You cannot apply for LAS through Zerodha NBFC if the securities are not in your Zerodha Demat account.
Hi @Karthik / @Harshal_S_Katare
Is zerodha providing now this facility ? Partial unpledging and replacement ?
I will open the Zerodha LAS account accordingly . I mentioned my concern earlier on partial unpledging at below post
Any update on adding more nos of funds for LAS approved list ?
Hi @gpgane,
We will review the approved list in the next month and then decide whether to add more securities to it or not until then we request you to kindly wait. We appreciate your patience and cooperation in this regard.
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@Karthik is there a way to setup auto-debit for the interest payments? If we miss any one payment it would hurt our CIBIL badly even when the interest was very small.
Is that something being considered for the near future?
Hi @strontium,
There is no concept of EMI at Zerodha Capital, You are just required to pay the interest on a monthly basis and this interest amount can vary depending on the pending principal amount. Based on your repayments the interest amount changes every month hence it is difficult to set up a fixed mandate. This is the reason there is no auto-debit facility available. Hope this clarifies.
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Thanks @Harshal_S_Katare, for responding. Credit cards have a mandate setup for variable amounts, so I believe, technically it should be feasible. Is there a way to set up something so that we don’t have to bother about paying the payments on time? Can you share all possible payment methods that are supported so that I can check if some level of automation is possible? A screenshot of the payment page would be helpful.