Benefits of Loan Against Securities

Explore the feature and benefits of taking a loan against your securities. Know the application process and many more in detail.
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Leverage your investments for funds!
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3 mins read
09-October-2025

Have you ever needed urgent funds but did not want to sell your shares at the wrong time? A loan against shares could be the smart middle ground. It allows you to unlock the value of your stock portfolio while keeping your investments intact. Instead of liquidating, you simply pledge your shares as collateral and get access to quick liquidity. This is especially useful when markets are volatile and you do not want to miss out on potential growth or dividends. Whether you are expanding your business, covering a personal expense, or managing cash flow, this loan helps you act fast, without breaking your investment strategy.

Need funds without selling your stocks? Pledge your shares and get instant liquidity while your investments keep working for you. Apply now

Why investors choose a loan against shares?

For seasoned investors, selling assets just to raise short-term funds often feels like a setback. A loan against shares helps you avoid that. You continue to own your portfolio, earn dividends, and participate in market growth all while having access to cash when you need it most. It’s a flexible and cost-effective way to manage liquidity, especially for those who have built a strong investment portfolio over the years.

Do not sell your future gains to fund your present. Turn your shares into a smart, revolving credit line. Explore now

Features of loan against shares

  • Flexible loan amounts: The loan amount typically depends on the value of the shares being collateralised.
  • Repayment flexibility: These loans often come with flexible repayment options, allowing borrowers to choose a schedule that best suits their financial situation.
  • Revolver facility: Some lenders offer a revolving credit facility, where you can withdraw and repay funds according to your cash flow needs.
  • Online management: Most financial institutions provide online tools to manage your loan, track your securities, and monitor loan balances.
  • Flexible Tenures: Convenient tenure and repayment options starting from 7 days up to 36 months.
  • Continue earning your dividends: You keep earning dividends on your shares while availing loan against shares.
  • Only pay interest on the loan amount utilised: Pay interest only on the amount you've withdrawn and for the period utilised. You need not pay EMIs on the total approved loan amount.
  • All third-party DP shares are acceptable: All companies or DPs (Depository participants) DEMAT accounts are acceptable with us for a loan against shares.
  • Extra credit for increased share value: If the value of your share appreciates during the loan tenure, the pre-assigned loan limit will increase accordingly. Conversely, a decrease in share value will proportionally reduce the pre-assigned loan limit. This adjustment ensures that the “Sanction limit” remains unbreached.
  • Swap pledged shares when required: You have the flexibility to swap the pledged shares at any point of time during the tenure of your loan against shares.
Loan Against Shares
Loan Against Mutual Funds

Benefits of loan against securities

  • Immediate liquidity without selling assets
    One of the primary benefits of taking out a loan against securities is the ability to gain immediate liquidity without having to sell your valuable assets. This can be particularly beneficial during volatile market conditions where selling assets might result in losses.
  • Lower interest rates
    Loans secured against shares generally come with lower interest rates compared to unsecured loans. This is because the lender has a lower risk due to the collateral backing the loan.
  • No impact on investment gains
    Borrowing against your securities allows you to continue earning dividends and capital gains on your investments, as you still hold ownership of the shares.
  • Quick processing and disbursal
    Loans against securities are often processed and disbursed more quickly than other types of loans, given that the collateral is readily quantifiable and easily liquidated if necessary.

When should you consider this loan?

A loan against shares can be ideal if you:

  • Need quick funds for business expansion, travel, or education expenses.
  • Want to manage short-term liquidity without selling long-term investments.
  • Prefer flexible repayment options with minimal documentation.

It is also a strategic move during market corrections letting you retain your portfolio till prices recover.

Eligibility criteria for Loan Against Shares

Anyone can apply for our loan against shares online, as long as they meet the four basic criteria mentioned below. Also keep a few documents handy while applying for loan against shares.

  • Nationality: Indian
  • Age: 21 years to 90 years
  • Employment: Salaried, self-employed
  • Portfolio value: Minimum Rs. 50,000

How to apply for a loan against shares?

Applying for a loan against shares involves a straightforward process. Initially, you need to ensure that the shares you own are approved by the lender for such a loan. It is important to assess the terms and conditions offered by different institutions to find the most favorable deal.

Documentation

You will need to prepare and submit various documents, including proof of ownership of the shares, identity proofs, and financial statements.

Loan valuation

The lender will assess the current market value of your shares to determine the amount of loan you can secure.

Application review

Once you submit your application along with all required documents, the lender will review it to ensure compliance with their criteria before approving the loan.

Step-by-step guide to apply for loan against shares

Applying is quick and straightforward:

  1. Eligibility check: Verify your eligibility for the loan, including the types of securities that can be pledged.
  2. Select a lender: Choose a financial institution that offers competitive interest rates and terms.
  3. Documentation: Gather all necessary documents such as latest share statements, identity proof, and financial records.
  4. Application submission: Submit the application form along with the documents to the lender either online or at a branch.
  5. Loan processing: The lender will evaluate your application, perform the necessary checks on the securities, and assess your financial health.
  6. Loan disbursal: Upon approval, the loan amount will be disbursed into your designated account.

Conclusion

A loan against shares is more than just a source of quick funds it’s a smart liquidity strategy for investors who prefer to stay invested while meeting immediate financial goals. You retain ownership, enjoy market gains, and get access to instant cash when needed. It is crucial, however, to borrow responsibly and ensure timely repayments to protect your investment value.

Stay invested, stay liquid. Leverage your shares for instant funds today without missing out on future growth. Apply for loan against shares today!

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Frequently asked questions

What are the features of a loan against shares?
A loan against shares offers several distinctive features. It allows borrowers to leverage their investment in shares to secure funding without selling the shares. The loan amount is usually a percentage of the shares' market value, typically ranging from 50% to 70%. Interest rates for these loans are generally lower than unsecured loans due to the collateral offered. Additionally, the disbursement process is quick, providing liquidity to the borrower. However, it's important to note that if the market value of the pledged shares falls significantly, the borrower may need to provide additional collateral or repay part of the loan.
What securities can be pledged for a loan against shares?
The securities that can be pledged for a loan against shares typically include shares of publicly traded companies, mutual fund units, and bonds. Lenders often have a specific list of approved securities that qualify for these loans. The eligibility of the shares is usually determined based on their liquidity, trading volume, and stability in the market. It's essential for borrowers to verify with the lender which securities are accepted before proceeding with the loan application.
What are the benefits of a loan against shares?
The benefits of a loan against shares include immediate liquidity without the need to liquidate your investment. This type of loan provides an opportunity to meet urgent financial needs while keeping your investment portfolio intact. The interest rates are usually more favorable compared to unsecured loans, making it a cost-effective borrowing option. Additionally, the repayment terms can be flexible, allowing borrowers to manage their cash flow more efficiently. It also enables investors to potentially increase their return on investment by not selling their shares during market lows.

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