₹10,000 - ₹25 Cr
Loan of up to 80% of policy value| Funding against policies under lock-in period
Overview
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What is loan against Demat shares?
In summary
A loan against demat shares can provide liquidity while allowing you to retain ownership of eligible investments.
- Secured borrowing: Pledge eligible listed shares as collateral and access funds without selling them.
- LTV: Bajaj Finance currently offers up to 50% LTV against eligible pledged shares.
- Eligibility: Indian resident applicants aged 21 to 90 years can apply, subject to applicable criteria.
- Minimum holding: The minimum eligible security value starts from Rs. 50,000 under applicable criteria.
Interest: Current published rates vary by product page and terms, with rates reaching 15% per annum.
Understanding eligibility, collateral requirements, and repayment obligations can help you manage borrowing responsibly.
What is a loan against Demat shares?
A loan against demat shares is a secured facility where eligible listed shares held in your demat account are pledged as collateral. The lender determines the eligible loan amount based on the pledged securities and applicable LTV requirements. Bajaj Finance currently offers up to 50% of eligible share value under its Loan Against Shares facility.
You continue owning the pledged shares during the loan tenure, subject to applicable terms. Eligible dividends and corporate benefits may continue according to the security and facility conditions.
How does loan against Demat shares works?
The process begins when you select eligible listed shares available in your demat account. You then complete the application and required pledge formalities. Bajaj Finance assesses the eligible securities and determines the borrowing amount based on applicable lending terms. After successful verification and pledging, the approved amount is disbursed. The LTV can currently reach 50% for eligible shares. A decline in share prices can affect collateral coverage and create a requirement for timely regularisation.
Stay invested while meeting urgent financial needs with a loan against shares portfolio. Apply for a loan against shares now
What are the eigibility criteria for loan against Demat shares?
How to apply for Bajaj Finance loan against shares
Bajaj Finance provides eligibility criteria for individual applicants seeking a Loan Against Shares facility.
- Nationality: You must be an Indian resident.
- Age: Applicants should generally be between 21 and 90 years.
- Employment: Salaried and self-employed individuals can apply.
- Security value: Eligible security holdings should meet the applicable minimum requirement.
Eligible securities: Shares must belong to the lender's approved security list.
Before applying, confirm the latest eligibility requirements and approved securities applicable to your application.
Advantages of loan against Demat shares
A Loan Against Shares can help you access liquidity while retaining eligible investments.
- Retain ownership: Your eligible pledged shares remain yours during the facility.
- Access liquidity: Raise funds without immediately selling your investments.
- Interest on utilisation: Bajaj Finance charges interest according to the amount utilised and applicable terms.
- Online access: The application and account management process can be completed digitally.
Potential dividend continuity: Eligible dividends may continue during the pledge, subject to applicable conditions.
These features can support short-term liquidity requirements without immediately disrupting your investment holdings.
Benefits of loan against demat shares
Features & Benefits for Bajaj Finance loan against shares
A loan against demat shares can provide access to funds while preserving your investment position.
- Liquidity without selling: Pledge eligible shares instead of liquidating your investment holdings.
- Retain investment exposure: Continue holding your pledged securities during the loan tenure.
- Flexible utilisation: Use funds according to applicable loan terms and conditions.
- Digital processing: Bajaj Finance provides an online application and verification process.
- Utilisation-based interest: Interest applies according to the amount utilised, subject to applicable facility terms.
- Portfolio management: Eligible securities can be monitored through the lender's digital account-management platform.
Risks and considerations
A loan against demat shares carries risks related to market movements, collateral coverage, and repayment obligations.
- Market risk: Falling share prices can reduce the value of your pledged collateral.
- Margin shortfall: A decline in collateral value can require additional collateral or repayment.
- Interest costs: Interest and applicable fees increase the total borrowing cost.
Collateral loss: Failure to meet repayment or collateral requirements can result in pledged shares being sold.
Avoid borrowing up to the maximum available limit when your repayment capacity is uncertain.
Tips to manage risk: Monitoring, alerts, portfolio safety
Eligibility criteria for Bajaj Finance loan against shares
Monitor portfolio value regularly
Track the market value of pledged shares and review your available collateral coverage. Market declines can affect the amount available against your securities.
Set up price alerts for key stocks
Use suitable market or broker alerts to track significant price movements. Early awareness can help you respond before collateral requirements become difficult to manage.
Diversify pledged securities
Avoid concentrating your pledged collateral in one or two securities. Diversification can reduce the impact of sharp movements in individual shares.
Maintain buffer margin with extra shares
Avoid pledging only the minimum securities required for your borrowing. An adequate collateral buffer can provide additional protection against market fluctuations.
Review loan account statements frequently
Check your outstanding balance, utilised amount, interest, charges, and collateral position regularly. This can help you identify repayment requirements promptly.
How to apply for a loan against Demat shares?
A Loan Against Shares application involves checking eligibility, submitting details, completing KYC, and pledging eligible shares.
Step 1: Choose a lender
Review the lender's eligible security list, LTV, interest rate, fees, tenure, and repayment terms before applying.
Step 2: Submit the application
Bajaj Finance allows you to begin the process online by entering your mobile number and completing OTP verification.
Step 3: Provide the required documents
Common documents include PAN, identity and address proof, and your demat holdings or statement.
Step 4: Evaluate your eligible securities
Provide the names and quantities of shares you intend to pledge. The lender determines the eligible borrowing amount based on applicable criteria.
Step 5: Complete the agreement
Complete the required e-agreement, mandate, and pledge formalities through the prescribed digital process.
Step 6: Receive the funds
The loan is disbursed after successful verification and completion of the share-pledging process.
Interest rates and charges
Interest rates and charges depend on the applicable product terms and borrower requirements.
- Interest rate: Published Bajaj Finance pages currently show rates ranging from 8% to 15% per annum.
- Processing fee: Up to 4.72% of the loan amount, inclusive of applicable taxes.
- Annual maintenance: Up to 1.18% of the sanctioned amount, inclusive of applicable taxes.
- Prepayment charges: Applicable charges depend on the sanctioned amount and facility conditions.
- Bounce charges: Charges may apply when a payment instrument or mandate fails.
Other charges: Pledge, depository, brokerage, stamp duty, and related charges may apply.
Always check the applicable schedule of charges before accepting the facility.
When should you consider a loan against Demat shares?
How to Secure a Rs. 2 Crore Loan Against Securities Instantly
A Loan Against Shares may be considered when you require liquidity without immediately selling eligible investments. It can suit borrowers who have sufficient eligible shares and a clear repayment plan. It may also support short-term financial requirements where preserving investment ownership remains important.
However, market-linked collateral requires regular monitoring. Borrow only an amount that remains manageable under potential share-price fluctuations.
Difference between loan against shares and selling investments
| Basis | Loan against shares | Selling investments |
| Ownership | You retain ownership of pledged shares during the facility. | You no longer own the shares after selling them. |
| Liquidity | Provides funds against eligible pledged securities. | Provides immediate proceeds from the sale. |
| Market exposure | You remain exposed to future share-price movements. | You exit the investment and its future market movement. |
| Collateral obligation | Repayment and collateral requirements apply. | No loan repayment obligation arises from the sale. |
| Potential dividends | Eligible dividends may continue, subject to applicable conditions. | Future dividends are no longer received after selling. |
Choosing between these options depends on your liquidity requirement, investment strategy, and repayment capacity.
Conclusion
A loan against demat shares can help you access funds without immediately liquidating eligible listed investments. The facility uses pledged shares as collateral while allowing continued ownership. However, share-price fluctuations can affect collateral coverage and borrowing requirements. Monitor your pledged securities, understand applicable charges, and maintain timely repayments.
Unlock liquidity the smart way, pledge your loan against shares portfolio and stay invested for tomorrow while meeting today’s needs. Apply for a loan against shares today!
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Frequently asked questions
Eligibility
General
What is the margin for loan against demat shares?
The margin for a loan against Demat shares can go up to 50% or more based on RBI guidelines, typically of the market value of the pledged shares. This margin varies depending on the lender and the type of shares pledged.
Which shares are eligible for a loan against Demat shares?
Only approved listed shares from the lender's pre-approved securities list are eligible. The shares must be held in a Demat account, and not under any lock-in or lien.
What happens if the share value drops after taking a loan?
If the share value drops significantly, the lender may issue a margin call, asking you to pledge more shares or repay part of the loan to maintain the loan-to-value (LTV) ratio.
Can I take a loan against my Demat shares?
Yes, you can take a loan against shares held in your Demat account, provided they are from the lender’s approved list. The shares are pledged as collateral, and the loan is given based on their market value.
What are the interest rates for a loan against Demat shares?
Interest rates typically range from 8% to 15% per annum, depending on the lender, loan amount, and type of shares pledged. Rates may vary for listed vs. unlisted shares and based on borrower profile.
Which shares are eligible for LAS?
Not all shares qualify for a Loan Against Shares. Lenders usually accept listed, liquid, and actively traded stocks from approved lists published by recognised exchanges. Blue-chip companies and stocks with stable performance are commonly eligible, while penny stocks or highly volatile shares may not be accepted.
Can I sell my shares while LAS is active?
No, you cannot directly sell pledged shares while the loan is active, as they remain under lien with the lender. However, you may request substitution by pledging other eligible shares, subject to lender approval, ensuring your loan balance remains adequately secured.
What documents are needed to apply?
Basic KYC documents such as identity proof, address proof, PAN card, and recent passport-size photographs are generally required. Additionally, details of your demat account, shareholding statements, and sometimes bank account proofs are needed for verification. Documentation is usually minimal, ensuring faster approval and processing.
How long does it take to get funds after pledging demat shares?
Funds are typically disbursed the same day or next business day after successful pledge setup and verification with Bajaj Finance. Apply online with OTP verification to begin the process.
What is the penalty for default?
If you default, the lender reserves the right to sell your pledged shares to recover dues. Additional penalties may include late payment fees and higher interest on overdue amounts. Persistent defaults could also impact your credit score and future borrowing eligibility.
Can NRIs apply for Loan Against Demat Shares?
Yes, NRIs can apply, but eligibility depends on the lender’s policies and RBI guidelines. Typically, NRIs must maintain a demat account designated for NRI holdings and may need to provide additional documents such as overseas address proof and NRI-specific compliance forms for approval.
Disclaimer
1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company(BAJAJ FINANCE) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.
2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.