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Guide · Loans against property, FDs, gold, securities and insurance
Pledging an asset can get you a lower rate or a bigger amount. It can also cost you the asset. Here is how each type of secured loan in India works, what it really costs, and how it compares with an unsecured personal loan.
With a secured loan you give the lender a legal claim over an asset until the loan is repaid. For property this is a mortgage; for gold, deposits, shares and policies it is a pledge, lien or assignment. Because the lender can recover its money by selling the asset, it takes less risk, and that usually shows up as a lower interest rate, a larger amount or a longer tenure than you would get without security.
Three ideas drive every secured loan:
The other side is the unsecured loan, such as a personal loan or credit card, where nothing is pledged and the lender relies on your income and repayment record. For the basics of that comparison, see our explainer on secured vs unsecured loans.
You mortgage a residential or commercial property you own and receive a lump sum for any legitimate purpose. Lenders typically lend a part of the property’s market value, often somewhere around half to two-thirds, and tenures can run for many years. It is the cheapest way to raise a large sum if you own property with a clear title, but it is also the slowest: expect legal and technical checks, a valuation, and documents such as the title chain and encumbrance certificate. Read loan against property: benefits and limitations and what to check before taking one.
Banks lend against your own FD, commonly up to a high share of the deposit’s value, usually at a rate a little above the FD rate. Your deposit keeps earning interest. There is no credit check worth worrying about and the money can come through the same day, but the amount is capped by the deposit. This is often the cheapest short-term option if you have an FD you don’t want to break. See loan against fixed deposits.
You pledge gold jewellery or coins with a bank or NBFC, which values the purity and weight. The RBI caps the loan-to-value on gold loans; under directions announced in June 2025, the cap is tiered by loan size, at 85% for loans up to ₹2.5 lakh, 80% for ₹2.5 lakh to ₹5 lakh and 75% above that. Gold loans are fast and need little paperwork, but if gold prices fall or you miss payments, the lender can auction the pledged gold after giving notice. Our guide to gold loan pros, cons and RBI rules and 7 gold loan mistakes cover it in detail.
You pledge listed shares or mutual fund units, usually through a digital lien, and get a loan or overdraft limit. LTVs are lower for equity, often around half the value, and higher for debt funds and bonds. You keep the investment and its upside, but a market fall can trigger a margin call: you must add more units or repay part of the loan quickly, or the lender sells some of your holdings at a bad moment.
Traditional endowment and money-back policies with a surrender value, including many LIC policies, allow a loan of a portion of that surrender value. The policy is assigned to the insurer until you repay. Term plans and most pure-protection plans have no surrender value, so they don’t qualify. If the loan and unpaid interest grow larger than the surrender value, the policy can lapse, taking your family’s cover with it.
| Type | Typical LTV | Speed | Paperwork | Main risk |
|---|---|---|---|---|
| Loan against property | Often around 50–70% of market value | Weeks | Heavy: title, valuation, legal | Property at stake; long commitment |
| Against FD | High share of the deposit | Same day possible | Light | Low; deposit adjusted if unpaid |
| Gold loan | RBI cap: 75–85% by loan size | Hours | Light | Auction of jewellery on default |
| Against shares or funds | Lower for equity, higher for debt | 1–2 days | Moderate, mostly digital | Margin calls in a market fall |
| Against insurance policy | A portion of surrender value | Days | Moderate | Policy lapse, loss of cover |
| Unsecured personal loan | No asset; based on income | Days | Light for salaried borrowers | Higher rate; credit score hit if you default |
Typical ranges are general market practice as of October 2026, not offers. Each lender sets its own LTV within any RBI limits; check the lender’s current terms and your Key Fact Statement.
A secured loan’s rate is usually lower, but the total cost includes charges that unsecured loans often don’t carry:
The APR in the Key Fact Statement rolls the rate and lender charges into one annual figure. RBI rules require regulated lenders to share a KFS with the APR before you sign, so use it to compare a secured and an unsecured offer like for like.
Take an illustrative need of ₹10 lakh. A loan against property at 10% a year looks far cheaper than a personal loan at 14%. But because LAP is often taken over long tenures, the total interest can end up much higher.
Illustrative rates for arithmetic only, not quotes from any lender. Reducing-balance EMIs. Excludes processing, legal, valuation and stamp-duty costs, which are usually higher on a loan against property.
The lesson is not that one product always wins. A secured loan repaid quickly is usually the cheapest money available. A secured loan stretched over ten years for a three-year need can cost more than an unsecured loan, while also putting your home on the line. Match the tenure to the purpose, then compare total cost.
A missed EMI on a personal loan hurts your credit score. A missed EMI on a secured loan can also cost you the asset.
Under ₹25 lakh, repaid within three years, an unsecured personal loan is often simpler. Larger sums over many years usually point to property-backed borrowing.
Gold and FD loans are fastest. A personal loan for a salaried borrower takes days. A loan against property takes weeks.
If the honest answer is no, prefer an unsecured loan you can repay, or borrow less.
Put each Key Fact Statement side by side and add the costs that sit outside the APR, such as stamp duty.
Omozing, the digital lending brand of RBI-registered NBFC Aparampaar Finance, offers unsecured personal loans for salaried people. We do not take property, gold, deposits, shares or policies as security. If you are comparing a secured option with a personal loan, these are our terms:
You need two documents, your six-month salary-account statement and latest salary slip. A credit officer reads your full credit report, and co-applicants such as a spouse or family member are accepted. If your score is between 600 and 750, read about our personal loan with a CIBIL score from 600. If you already hold several loan-app loans, SmartSwitch can replace them with one EMI instead.
If you are salaried with a take-home of ₹40,000 or more and a credit score of 600 or more, check what an unsecured Omozing personal loan would look like. Your rate, fees and APR are in the Key Fact Statement before you sign.
No. Omozing offers unsecured personal loans for salaried people, up to ₹25 lakh with no collateral. This page is a guide to secured loans offered by banks and other lenders, to help you compare.
The rate is usually lower, but the total cost depends on tenure and charges. A secured loan stretched over many years can cost more in total interest than a shorter unsecured loan, and it adds valuation, legal and other fees.
Loan-to-value is the maximum loan as a percentage of the asset’s value. If the LTV is 75% and your asset is valued at ₹4 lakh, you can borrow up to ₹3 lakh.
After the notice and process set out in your agreement and the applicable rules, the lender can sell the pledged asset to recover its dues. The default is also reported to credit bureaus, which lowers your score.
It is a loan, so it can be reported to credit bureaus. Repaying on time adds positive history; defaulting hurts your score, even though the lender can recover from the deposit.
Often more easily than an unsecured loan, because the asset reduces the lender’s risk. Gold and FD loans in particular rely mainly on the collateral.
Usually not. Loans are available against policies with a surrender value, such as many endowment and money-back plans. Pure term plans have no surrender value.
A gold loan can be disbursed within hours once the gold is valued. A personal loan for a salaried borrower usually takes a few days, but nothing is pledged.
Omozing is the digital lending brand of Aparampaar Finance Private Limited, an RBI-registered non-deposit-taking NBFC. Omozing offers unsecured personal loans only; references to secured loans are general information, not offers. Loans are subject to credit assessment. See our regulatory disclosures, schedule of charges and grievance redressal process.