NBFC Loan Against Securities

NBFC loan against securities offers a smart borrowing option by allowing you to pledge financial assets like shares or mutual funds. It’s a quick, flexible way to raise funds while retaining ownership of your investments.
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3 mins read
10-October-2025

When financial needs arise, selling your investments should not be your first choice. With a loan against securities from an NBFC, you can borrow against your shares, or mutual funds and still retain ownership and market gains. NBFCs are known for their quick disbursal, flexible terms, and simple documentation, making them an efficient option for individuals and businesses seeking fast access to funds.

Need funds without breaking your investments? Apply for a loan against securities today and convert your portfolio into instant liquidity.

What is an NBFC?

An NBFC, or Non-Banking Financial Company, is a financial institution that offers credit facilities, asset financing, and investment-related services similar to banks, but without a banking license. NBFCs are regulated by the Reserve Bank of India (RBI) and play a crucial role in extending credit to individuals and businesses who may not meet traditional bank requirements. While NBFCs cannot accept demand deposits like banks, they are known for their speed, convenience, and flexible lending norms, especially when it comes to asset-backed products such as loans against securities.

Benefits of taking a loan against securities from NBFCs

Opting for a loan against securities from an NBFC comes with several advantages:

  • Quick access to funds: NBFCs typically have shorter processing times and minimal paperwork, enabling faster loan approvals.

  • Retain ownership: Continue earning dividends, interest, or capital appreciation while your securities are pledged.

  • Flexible terms: NBFCs often offer customisable loan amounts, tenure, and repayment options to match your needs.

  • Lower interest rates: Since these are secured loans, rates are generally lower compared to unsecured personal loans.

  • No prepayment pressure: Many NBFCs allow partial or full prepayment at nominal charges or none at all.

Loan Against Shares
Loan Against Mutual Funds

Types of securities eligible for loan against securities

NBFCs typically accept a wide range of financial instruments as collateral:

  • Shares and stocks of listed companies

  • Mutual funds (equity, hybrid, or debt)

  • Fixed deposits held with approved institutions

  • Life insurance policies with surrender value

Eligibility criteria for NBFC loan against securities

While the specifics vary by institution, the general eligibility requirements include:

  • Age: Applicants should be between 21 and 90 years.

  • Ownership: You must hold eligible securities such as shares, bonds, or mutual funds in your name.

  • KYC compliance: Valid documents like PAN, Aadhaar, voter’s ID, or passport are required.

  • Credit profile: A good credit score enhances your chances of approval and helps secure a better interest rate.

  • Income proof: In some cases, income documents may be requested to assess repayment capacity.

Documents required for an NBFC loan against securities

To simplify verification, NBFCs usually ask for only a few key documents:

  • PAN card and Aadhaar card

  • Recent passport-sized photograph

  • Bank statement for the past three months

  • Demat account statement or proof of security ownership

  • Income proof (if required)

Once these are verified digitally, your loan can be approved in a matter of hours.

Process for availing a loan against securities from an NBFC

Applying for an NBFC loan against securities is quick, digital, and hassle-free. Here’s how it works:

  1. Start your online application by visiting the lender’s digital portal.

  2. Enter your personal details such as name, PAN, and contact information.

  3. Add the securities you wish to pledge shares, or mutual funds.

  4. The lender evaluates your portfolio and shares a customised loan offer based on your eligible value.

  5. Complete digital KYC using online verification tools.

  6. Register an e-mandate for automated repayments.

  7. Digitally accept the loan agreement and pledge your securities.

  8. Receive funds directly in your bank account once verification is complete.

The entire process can be completed online, often resulting in same-day loan disbursal.

Need funds fast? Apply for an NBFC loan against securities and get quick access to cash while your investments continue to grow.

How are loan amounts and interest rates determined?

The loan amount is based on the Loan-to-Value (LTV) ratio, which represents a percentage of your pledged securities’ market value. According to RBI guidelines, you can typically get up to 50% of the market value of shares and up to 80% for mutual funds. Interest rates usually range between 8% and 15%, depending on factors such as:

  • Type and quality of securities pledged

  • Market volatility

  • Loan amount and tenure

  • Borrower’s credit profile

Fees and charges to consider

When applying for a loan against securities from an NBFC, keep in mind the following charges:

  • Processing fee: Usually up to 4.72% of the loan amount.

  • Prepayment charges: Some NBFCs allow early repayment with minimal or no fees.

  • Penal charges: Applicable for delayed payments or defaults.

It is always best to check the complete fee structure before applying to ensure transparency.

Key differences between loans from banks vs. NBFCs

Feature

Banks

NBFCs

Regulation

Strictly regulated by RBI

Regulated by RBI with more flexibility

Approval time

Longer due to stricter guidelines

Faster loan approval and disbursement

Interest rates

Generally lower

Slightly higher, but offer flexibility

Eligibility

Stricter credit score and income requirements

More lenient, suitable for varied profiles

Loan customisation

Limited customisation options

Highly customised to borrower’s needs

 

Risks and considerations

While loans against securities are generally safe, it is wise to be aware of potential risks:

  • If the market value of your pledged securities falls, you may receive a margin call to maintain the required LTV ratio.

  • Failure to meet margin calls or repay on time can lead to liquidation of pledged securities.

  • Interest continues to accrue even if you do not draw down the full approved amount.

Being mindful of these factors helps you borrow responsibly.

Conclusion

A loan against securities from an NBFC offers a convenient, flexible, and cost-effective way to unlock liquidity without disturbing your investment portfolio. With faster approvals, fewer formalities, and flexible repayment options, NBFCs make it easier for you to meet short-term financial needs, all while your investments continue to work for you.

Need quick liquidity without selling your assets? Apply now for a loan against securities and convert your investments into instant financial power.

Frequently asked questions

What documents are required to apply for a loan against securities with an NBFC?
To apply for a loan against securities with an NBFC, you'll need to provide KYC documents (official valid documents), ownership documents of the securities, income proof (in some cases), and a duly filled loan application form.

How does a loan against securities from an NBFC work?
A loan against securities from an NBFC allows you to pledge your stocks, bonds, or mutual funds as collateral. The NBFC approves a loan amount based on the value of the pledged securities, and you continue to retain ownership while receiving funds.

What types of securities can I pledge for an NBFC loan?
You can pledge various securities such as listed shares, mutual funds (equity or debt), government bonds, corporate bonds, fixed deposits, and insurance policies with surrender value when applying for an NBFC loan.

How quickly can I get a loan against securities from an NBFC?
A loan against securities from an NBFC can be processed and disbursed quickly, depending on the submission of required documents and the value of the pledged securities.

How much can I borrow with an NBFC loan against securities?

You can typically borrow up to 50%–90% of the value of your pledged securities, depending on the type of asset and NBFC policy. Shares and mutual funds often have lower loan-to-value (LTV) ratios, while insurance policies and bonds may offer higher limits.

Can I retain dividends or interest when I pledge securities?

Yes, in most cases, you continue to receive dividends, interest, and other benefits from your pledged securities. The lender only holds the securities as collateral and does not claim ownership unless you default on the loan.

What happens if asset value falls below LTV?

If the value of your pledged securities drops below the permissible LTV ratio, the NBFC may ask you to either top up the collateral or partially repay the loan. Failure to do so may lead to liquidation of the pledged securities to recover dues.

How much can I borrow with an NBFC loan against securities?

You can typically borrow up to 50% - 80% of the value of your pledged securities, depending on the type of asset and NBFC policy. Shares and mutual funds often have lower loan-to-value (LTV) ratios, while insurance policies and bonds may offer higher limits.

Can I retain dividends or interest when I pledge securities?

Yes, in most cases, you continue to receive dividends, interest, and other benefits from your pledged securities. The lender only holds the securities as collateral and does not claim ownership unless you default on the loan.

What happens if asset value falls below LTV?

If the value of your pledged securities drops below the permissible LTV ratio, the NBFC may ask you to either top up the collateral or partially repay the loan. Failure to do so may lead to liquidation of the pledged securities to recover dues.

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