A Loan Against Shares (LAS) is a secured borrowing facility that enables investors to unlock the value of their equity holdings without selling them. By pledging eligible shares as collateral, you can obtain funds for personal, business, or investment needs while continuing to retain ownership of your portfolio and benefit from potential market appreciation. Since the loan is backed by securities, lenders generally offer more competitive interest rates than unsecured credit options. Interest rates typically range between 8.00% and 15.00% per annum, depending on the lender, pledged securities, and borrower profile, making LAS a cost-effective source of liquidity.
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What is a loan against shares and how does it work?
A loan against shares is a financial arrangement where individuals pledge their stock holdings or shares as collateral to secure a loan from a lender. This type of loan allows borrowers to leverage their investments without liquidating them, providing a convenient way to access funds for various needs, such as education, business expansion, or personal expenses. Here is how it works:
Pledging shares
To obtain the loan, borrowers pledge their shares with the lender. These shares must typically be listed in recognized exchanges and approved securities.
Loan amount
The loan amount sanctioned is usually a percentage of the market value of the pledged shares, up to 50%, depending on the lender's policies.
Interest rates
Loan against shares typically comes with lower interest rates compared to unsecured loans, as the shares act as collateral, reducing the lender’s risk.
Repayment
The borrower repays the loan through EMIs or flexible payment options. Meanwhile, they retain ownership of the shares but cannot sell or trade them until the loan is fully repaid or close the account.
Eligibility criteria
Eligibility is determined based on factors such as the borrower’s income, credit score, and the type of shares being pledged.
Risk management
If the value of the pledged shares drops significantly, the lender may ask for additional collateral or liquidate shares to recover the outstanding loan amount. A loan against shares offers a quick and hassle-free way to access funds while preserving your investment portfolio, ensuring financial flexibility in times of need.
Current interest rates for loan against shares (2026)
Here is how different lenders stack up in terms of interest rates in 2026:
| Lender | Interest Rate (per annum) | Loan Amount Range |
|---|---|---|
| Bajaj Finance Limited | 8% - 15% p.a. | Rs. 10,000 – Rs. 1,000 crore |
| HDFC Bank | 9.25% to 12.50% | Rs. 1 lakh up to Rs. 20 crore |
| ICICI Bank | 10.5% – 13.0% p.a. | Rs. 5 lakh onwards |
| Axis Bank | 11.0% – 13.5% p.a. | Rs. 5 lakh onwards |
| Kotak Mahindra Bank | 10.25% – 12.75% p.a. | Rs. 10 lakh onwards |
| SBI Capital Markets | 9.95% – 12.25% p.a. | Rs. 5 lakh – Rs. 25 crore |
Loan-to-Value ratio differences across lenders
LTV ratio is the percentage of your shareholding’s market value that lenders allow you to borrow. Here's how the top lenders compare:
| Lender | Maximum LTV ratio | Remarks |
|---|---|---|
| Bajaj Finance Limited | Up to 50% | Offers higher LTV on select shares |
| HDFC Bank | Up to 50% | Based on approved share list |
| ICICI Bank | Up to 50% | Custom limits based on risk rating |
| Axis Bank | Up to 55% | Adjusted based on share volatility |
| Kotak Mahindra Bank | Up to 50% | Subject to client profile |
| SBI Capital Markets | Up to 50% | Market value-based lending |
What is the processing fee for a loan against shares?
Besides interest rates, lenders also levy processing and service fees. Here is a comparative breakdown:
| Lender | Processing fees | Other charges |
|---|---|---|
| Bajaj Finance Limited | Up to 4.72% | Minimal documentation, transparent terms |
| HDFC Bank | Rs. 999 – Rs. 5,000 | Annual renewal charges apply |
| ICICI Bank | 0.5% – 1% of loan amount | May include pledge and prepayment fees |
| Axis Bank | 1% of loan amount | Overdue interest and administrative charges |
| Kotak Mahindra Bank | Rs. 3,500 – Rs. 7,000 | Legal and stamp duty charges |
| SBI Capital Markets | Rs. 2,000 + GST | Annual maintenance fees possible |
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Eligibility criteria for availing loan against shares
Meeting the lender’s eligibility criteria is the first step. Here’s a simple checklist for loan against shares eligibility:
- Age: Between 18 and 90 years
- Employment: Salaried, self-employed, or business owner
- Ownership: Holding of approved listed shares
- CIBIL score: Generally not required
- KYC-compliant: PAN and Aadhaar must be valid and active
Some lenders may also check your income or business turnover, especially for large-value loans.
Not sure if you are eligible? Use an online eligibility calculator to find out instantly before applying.
