Loan against property vs loan against bonds

Learn about loan against property and loan against bonds as borrowing instruments and the difference between them.
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3 mins
03-July-2025

Life can throw unexpected expenses at any time whether it is for a medical emergency, a business need, or to consolidate high-interest debts. In such moments, liquidating long-term investments like bonds or real estate may seem like a quick fix. But there is a smarter way.

Instead of selling your assets, you can borrow against them. That’s where a loan against property or a loan against bonds can help. But which one suits you better? Let us break it down in simple terms.

Need urgent funds but don’t want to sell your bonds? Pledge your securities and access quick credit today. Apply for a loan against bonds

What is a loan against property?

A loan against property is a secured loan where you offer your real estate as collateral. It could be a house, plot of land, or a commercial property. Once your property is pledged, you can get a lump sum amount, which can be used for:

  • Expanding your business
  • Paying medical bills
  • Funding a wedding or education
  • Consolidating existing loans

The biggest benefit? You still own your property as long as you repay on time. But remember, mortgaging property is a serious commitment and can take time due to extensive paperwork and valuation processes.

Have investments in bonds lying idle? Get quick funds by using them as collateral no need to risk your property. Apply now

What is a loan against bonds?

A loan against bonds lets you unlock the value of your investments without selling them. Here, you pledge your bonds as collateral and receive funds in the form of an overdraft or term loan.

The best part? Your bonds continue to earn income, even while they are pledged. This makes it a smart move for those who want liquidity without letting go of long-term returns.

These loans are not limited to individuals. Businesses like LLPs, private firms, and sole proprietorships can also access funds through this option.

Loan Against Shares
Loan Against Mutual Funds

What is the difference between a loan against property and a loan against bonds?

Let us compare the two based on some key factors:

Mortgage or collateral

Both options require security. In loan against property, you mortgage real estate. In loan against bonds, you pledge your bonds. In both cases, the asset remains yours if you repay on time.

Documentation

Loan against bonds generally needs fewer documents: identity proof, address proof, bond certificates, and recent bank statements. On the other hand, loan against property often involves more documentation like property papers, valuation reports, and legal clearances.

Loan tenure

Loan against bonds usually comes with a tenure of up to 36 months, and can be renewed based on lender discretion. Loan against property, on the other hand, may offer a longer tenure sometimes up to 15 years.

Interest rates

Interest rates for both types of secured loans can vary. Loans against bonds may carry slightly higher rates compared to property loans but offer unmatched flexibility and quicker access.

What are the features of loan against bonds?

A loan against bonds comes with several user-friendly features that make it a smart choice when you need funds quickly but don’t want to sell your investments. Instead of liquidating your portfolio, you can use it as collateral and access capital while your bonds continue to earn returns. Here’s what makes this option attractive:

  • Interest is charged only on the amount you actually use, not the total approved limit. This makes it cost-effective if you only need partial funds.
  • You can get up to 95% of your bond’s market value as a loan. This high loan-to-value ratio means more usable funds when you need them most.
  • Your bonds stay active even while pledged. You continue to earn interest or returns on them during the loan tenure.
  • The process involves minimal paperwork, and disbursals are usually fast ideal when facing time-sensitive financial needs.
  • Processing fees may apply, typically up to a small percentage of the loan amount. These are generally transparent and clearly communicated upfront.

Whether it is for emergency funds, business needs, or personal obligations, a loan against bonds gives you access to liquidity without compromising your long-term investments.

Who can apply for a loan against bonds with Bajaj Finance Limited?

To be eligible for a loan against bonds, here’s what you’ll generally need:

  • You should be an Indian citizen.
  • Age between 18 and 90 years.
    (Some lenders may consider co-applicants up to 95 years.)
  • You can be salaried, self-employed, or a business owner.
  • The value of bonds you pledge should be at least Rs. 50,000.

These flexible eligibility terms make bond loans accessible to a wide range of borrowers, including professionals, retirees, and businesses.

Do not let your bonds sit idle. Put them to work. Access liquidity instantly and keep earning from your investments. Start your loan against bonds journey now

Conclusion

If you need funds and are caught between choosing a loan against property and a loan against bonds, it’s important to weigh your options carefully. A loan against property might offer larger loan amounts and longer tenure but involves higher risk, longer processing, and legal formalities. In contrast, a loan against bonds gives you quicker access to funds, minimal paperwork, and lets you retain ownership and earnings on your securities.

So, if you have bonds and want to raise funds without the emotional or legal stress of pledging property, a loan against securities is your go-to option.

Need funds today without selling your investments or risking property? Use your bonds smartly. Secure a loan and stay financially stable. Apply for a loan against bonds now

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