I haven’t availed any kind of such facilities, so my understanding could be wrong.
I think, pledging and loan are different things. So what the money is used for does not matter.
From Zerodha’s FAQs.
Loan Against Securities (LAS) is a facility wherein stocks and mutual funds in the demat account can be pledged to avail loan against it. LAS is similar to a loan against gold or a loan against property.
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