Understanding Loan Against Investment

Use your investments like stocks, mutual funds, or other securities as collateral to secure a loan.
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3 min
08-October-2025

Your investments can do more than just sit in your portfolio. Imagine needing urgent cash for a business opportunity, a medical emergency, or even a personal milestone—yet you don’t want to sell your stocks or mutual funds and miss out on future gains. That is where a loan against investment comes in. By pledging your shares, mutual funds, or insurance policies, you can quickly access funds while keeping ownership of your assets intact. This smart financing option allows you to meet immediate needs without disturbing your long-term financial plans. Whether you’re an entrepreneur, a salaried professional, or an investor, leveraging your investments for liquidity is a practical choice.

Need instant funds but do not want to break your portfolio? Take a loan against investment today and keep your assets growing. Apply now

What is a loan against investment?

A loan against investment is a secured financing option where you pledge your investments such as shares, or mutual funds as collateral. Instead of liquidating your portfolio, you use it to unlock cash flow for personal or business purposes.

A common form is a loan against shares, where you pledge listed company shares without transferring ownership. This way, your investments continue to earn dividends and appreciate while you access the funds you need.

Preserve your future gains get cash today with a loan against investment without selling your holdings. Apply now

Types of investments you can pledge

Here are popular assets you can use to raise funds without liquidating your investments:

Loan against shares

Pledge your listed equity shares held in your Demat account to secure funds. You keep ownership and benefit from market gains while accessing quick liquidity.

Loan against mutual funds

Use equity or debt mutual fund units as collateral. This option saves you from redeeming your units, letting your investments keep earning.

Loan against insurance policies

Pledge eligible life insurance policies like ULIPs or endowment plans. This allows you to raise cash without surrendering your policy or losing life cover benefits.

Loan Against Shares
Loan Against Mutual Funds

Key points about loan against investment

Understand the essentials before you pledge your assets—these points highlight why a loan against investment can be a smart choice.

  • Secured loan: Backed by your marketable securities.

  • Liquidity: Immediate cash flow without selling investments.

  • Loan amount: Based on the value of pledged securities.

  • Interest rates: Lower than unsecured loans due to collateral.

  • Flexible use: Suitable for emergencies, business expansion, or large purchases.

Turn your investments into opportunities. Apply for a loan against investment and stay financially prepared.

Features of loan against investment

Know what makes this financing option convenient and flexible these features make borrowing against investments stress-free.

  • Quick disbursal: Funds are released promptly after verification.

  • Flexible tenure: Repayment terms vary based on your needs.

  • Lower interest rates: Secured loans mean better rates.

  • No ownership impact: Continue to receive dividends and growth.

  • Loan-to-value ratio: Can range from 50% to 80%, depending on the asset.

Benefits of loan against investment

Explore why borrowing against investments can be a smart way to handle urgent needs while keeping your money working.

  • Immediate access to funds: Avoid delays in emergencies.

  • Retain investment benefits: Stay invested while borrowing.

  • Lower borrowing cost: Enjoy competitive interest rates.

  • Wide usage: Cover business, education, or personal expenses.

Eligibility criteria for loan against investment

To qualify for a loan against investment, applicants must meet specific criteria:

  • Type of securities: Must own qualifying securities such as stocks, bonds, mutual funds, etc.
  • Account requirements: Must have a Demat account in case of shares.
  • Loan margin: Must meet the loan-to-value ratio set by the lender.
  • Credit history: Good credit history and a satisfactory credit score.
  • Income stability: Proof of stable income to ensure repayment capability.

Documents Required for Loan Against Investment

Necessary documents typically include:

  • Identity proof: PAN card, Aadhaar card, Driver’s license, etc.
  • Address proof: Recent utility bills, passport, or rental agreement.
  • Income proof: Latest salary slips, tax returns, or profit and loss statements for self-employed individuals.
  • Investment documents: Statements of Demat accounts, mutual fund statements, bond certificates, etc.
  • Application form: Properly filled application form provided by the lender.

How to apply for a loan against investment?

Step 1: Assess your investments

Start by carefully reviewing your portfolio this includes shares, mutual funds, or insurance policies you own. Check their current market value to estimate how much loan you might be eligible for. This initial step helps you understand your borrowing potential and avoids unnecessary surprises later.

Step 2: Choose the right lender

Take time to compare different lenders. Look at interest rates, processing fees, loan-to-value ratios, and repayment terms. Choosing the right lender is crucial to ensuring affordable borrowing and stress-free repayments. Pick one that best fits your financial needs and long-term plans.

Step 3: Fill out the application and gather documents

Complete the loan application form accurately and gather all the necessary documents for verification. This usually includes ID proof, address proof, and statements of your pledged investments. Submitting a complete set of documents speeds up the approval process and reduces delays.

Step 4: Verification and investment valuation

The lender will verify your documents and evaluate the market value of the investments you’ve pledged. This assessment determines the final loan amount you are eligible for. Be prepared for minor fluctuations in valuation if markets are volatile.

Step 5: Loan approval and fund disbursal

Once your application and valuation are approved, the lender will disburse the funds often within 24–48 hours. The quick turnaround makes a loan against investment an excellent option for meeting urgent financial needs without disturbing your portfolio.

How to manage repayments effectively?

Managing repayments is essential to avoid penalties or unnecessary stress. Plan your repayment schedule carefully and stick to it. If the value of your pledged securities drops, your lender may ask you to either repay part of the loan or pledge additional assets to maintain the required margin. Staying proactive with repayments protects both your credit score and your investments.

Advantages over other financing options

A loan against investment offers several benefits when compared to alternatives like personal loans or credit cards:

  • Lower interest rates: Secured loans usually come with much more competitive rates than unsecured credit options.

  • Faster processing: Loan approval and disbursal are generally quicker than traditional financing methods, making it ideal for urgent needs.

  • Continued growth of investments: Your shares, mutual funds, or policies continue to earn dividends, interest, or appreciation even while they are pledged.

Tips to maximise your loan against investment

To make the most of your loan against investment:

  • Monitor your portfolio: Regularly check the value of your pledged assets to stay aware of any changes that could affect your loan.

  • Borrow responsibly: Only take the amount you genuinely need to avoid unnecessary debt.

  • Stay informed: Read and understand the lender’s terms, conditions, and repayment options before finalising the loan. This ensures you can manage repayments without stress.

Conclusion

A loan against investment is a practical, cost-effective way to raise funds without selling your assets. It gives you immediate liquidity, lower interest rates, and the flexibility to meet a range of financial needs all while your investments continue to grow. By understanding the types of investments you can pledge, the features and benefits, and the application process, you can make confident financial decisions.

Do not let your investments sit idle, get a loan against investment today and unlock their potential without giving up future gains. Apply for a loan against securities today!

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Frequently asked questions

Can I take a loan against my SIP investment?
Yes, you can take a loan against your SIP (Systematic Investment Plan) investments in mutual funds. Many lenders offer loans against mutual funds, including those acquired through SIPs. The loan amount is typically a percentage of the current value of the mutual fund units held in the SIP. The permissible loan amount and specific terms can vary based on the lender’s policies and the performance of the underlying mutual fund investments.
Can we take a loan against portfolio investment?
Yes, it is possible to take a loan against portfolio investments, which can include a diverse mix of assets such as stocks, bonds, mutual funds, and other securities. Financial institutions offer loans against these portfolio investments by evaluating the current market value and liquidity of the assets. The terms and conditions, including the loan-to-value ratio, interest rates, and loan amount, will depend on the type of assets in the portfolio and the lender’s risk assessment criteria.
What is the maximum loan amount I can get against my investments?

The maximum loan amount depends on the type and value of your pledged investment. Generally, lenders offer up to 50–90% of the investment's market value, subject to internal limits and regulatory guidelines.

What types of investments can I pledge for a loan?

You can pledge listed shares, mutual funds (equity and debt), bonds (government or corporate), and life insurance policies like ULIPs or endowment plans. These investments must be held in your name and meet the lender’s eligibility criteria.

What are the interest rates for loans against investments?

Interest rates typically range between 8% and 24% per annum, depending on the lender, investment type, loan amount, and repayment terms. Secured investments and high-value portfolios may attract more favourable rates.

Do I lose ownership of my investments if I take a loan?

No, you do not lose ownership. The investments are only pledged as collateral. You continue to benefit from market appreciation, dividends, or bonuses, unless specified otherwise by the lender.

How is the loan amount determined against investments?

Lenders assess the current market value of the pledged investments and apply a loan-to-value (LTV) ratio, which can range from 50% to 90%. The final loan amount is based on this valuation and your credit profile.

Do I lose ownership of my investments if I take a loan?

No, you do not lose ownership. The investments are only pledged as collateral. You continue to benefit from market appreciation, dividends, or bonuses, unless specified otherwise by the lender.

How is the loan amount determined against investments?

Lenders assess the current market value of the pledged investments and apply a loan-to-value (LTV) ratio, which can range from 50% to 90%. The final loan amount is based on this valuation and your credit profile.

Do I lose ownership of my investments if I take a loan?

No, you don’t lose ownership. Your investments are only pledged as security. You continue to retain ownership and can still benefit from dividends or interest earned while the loan is active.

How is the loan amount determined against investments?

The loan amount depends on the market value of your investments and the lender’s Loan-to-Value (LTV) ratio. Typically, lenders offer up to 50–80% of the investment’s value as the loan amount.

What is the loan tenure for a loan against investment?

The tenure varies by lender and investment type. It usually ranges from a few months to several years, offering flexibility for repayment based on your financial needs and investment performance.

Can I prepay my loan against investment without penalties?

Yes, most lenders allow partial or full prepayment without penalties. However, it’s best to confirm with your lender, as some may charge nominal fees for early repayment or foreclosure.

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