What Is the Purpose of a Loan Against Shares?

Know about the purpose of getting a loan against shares and how it can help in your financial needs.
APPLY NOW
Get a loan while your stocks keep growing!
APPLY NOW
3 mins read
14-October-2025

Need funds but don’t want to sell your stocks? A Loan Against Shares (LAS) lets you borrow by pledging your stocks as collateral while still owning them. Whether it’s for urgent expenses, business growth, or seizing new opportunities, LAS gives you quick liquidity with flexible repayment options. Why sell your investments when you can leverage them instead?

Get instant funds without disrupting your investment portfolio! Apply now

What is a loan against shares and how does it work?

A loan against shares is a secured form of credit that allows you to pledge your shareholdings to a lender in exchange for funds. The loan amount is usually up to 50% of the total market value of your shares, as per regulatory guidelines.

You continue to hold ownership of the pledged shares, meaning you can still benefit from any dividends or capital appreciation. The lender marks a pledge on your Demat account, which is released once the loan is repaid.

This financial tool is particularly useful for individuals looking to manage short-term expenses or explore new opportunities without selling their investments.

How loan against shares can support your financial needs?

Balancing your investment goals with immediate financial needs can be tricky. A loan against shares bridges this gap perfectly by letting you use the market value of your shares to meet short-term needs without selling them. Here is how it supports your financial strategy:

  • Quick access to funds: Get instant liquidity without selling your portfolio.
  • Financial flexibility: Use your shares as collateral and repay at your convenience.
  • Retain investment benefits: Keep earning dividends and enjoy potential market growth.
  • Competitive interest rates: Since the loan is secured, interest rates are typically lower than unsecured options.

Avail of instant funds with a loan against shares

A loan against shares is a secured loan where borrowers use their shareholdings as collateral to obtain financing. This type of loan is particularly attractive for those who need immediate access to funds but do not want to sell their investments. The process typically involves pledging your shares to the lender, who will then grant a loan amount based on a percentage of the shares’ market value. This solution not only provides quick liquidity but also allows you to retain ownership of your investments, thus benefiting from any potential capital gains or dividends.

Loan Against Shares
Loan Against Mutual Funds

Benefits of loan against shares

The purpose for loan against shares varies based on your financial goals. Whether you need liquidity for emergencies, investments, or long-term plans, this facility offers flexibility across multiple needs:

  • Emergency expenses: Manage medical or unforeseen costs without liquidating assets.
  • Business investment: Fund working capital, inventory, or expansion plans.
  • Education: Support your or your child’s higher education aspirations.
  • Debt consolidation: Replace multiple high-interest debts with one manageable loan.
  • Home renovation or major expenses: Upgrade your living space or fund big purchases without cashing out investments.

Your shares can fund your goals from education to business. Apply for a loan against shares to achieve them faster.

Top purposes for taking a loan against shares

Whether you need funds for personal use or business expansion, a loan against shares can be tailored to suit various purposes:

  • Emergency expenses: Handle sudden medical bills or unplanned events without financial strain.
  • Business investment: Inject capital into your business for growth or operational needs.
  • Education: Fund education for yourself or your family with flexible repayment terms.
  • Debt consolidation: Consolidate high-interest debts into a single, lower-interest loan.
  • Home renovation and other financial needs: Upgrade your home or cover other essential expenses without liquidating investments.

This flexibility makes it an appealing option for many, as it allows borrowers to meet their financial needs without compromising their investment portfolio.

How to avail loan against shares online?

  1. Eligibility check: Visit the lender's website to check if your shares qualify as collateral.
  2. Document preparation: Ready your identity proof, share certificates, and financial statements.
  3. Online application: Complete the application form on the lender's website and upload the necessary documents.
  4. Share valuation: The lender will assess the value of your shares to determine the loan amount.
  5. Approval and disbursal: Upon approval, the loan amount will typically be transferred to your account swiftly.

Availing a loan against shares online is a seamless process that lets you unlock funds without liquidating your investments. With quick approvals and minimal paperwork, you can access liquidity while still benefiting from market growth. Whether it's for business, emergencies, or personal goals, leveraging your shares ensures financial flexibility without disrupting your portfolio.

Access funds up to 50% of your portfolio's value without selling your shares! Apply now

Conclusion

A loan against shares is one of the most efficient ways to access funds without selling your investments. It helps you handle emergencies, pursue opportunities, or meet financial goals while keeping your portfolio intact. From flexible usage to competitive rates and instant liquidity, this option blends convenience with security giving you complete control over your finances. Just ensure you review your lender’s terms and maintain a repayment schedule that fits your plan.

Why sell your investments when you can borrow against them? Get instant liquidity with a loan against shares fast, flexible, and secured. Apply now to get started

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.
For customer support, call Personal Loan IVR: 7757 000 000

Frequently asked questions

For which purpose we can use a loan against shares?
A loan against shares can be used for various purposes, including personal expenses, funding large purchases, educational fees, medical bills, or business expansion. It offers the flexibility to meet urgent cash needs without liquidating your investments, allowing your portfolio to continue growing.
Can I use a loan against shares for business purposes?

Yes, you can use the loan for business expansion, working capital, or any financial need, making it a flexible funding option without selling your investments.

Do I need to sell my shares to get a loan against them?

No, your shares remain in your ownership. They are only pledged as collateral, allowing you to access funds while continuing to benefit from dividends and appreciation.

What happens to my pledged shares after I repay the loan?

Once you fully repay the loan, your pledged shares are released back to you, restoring your complete ownership and control over your investment portfolio.

What are the common reasons for taking a loan against shares?

People often take loans against shares to meet urgent liquidity needs without selling their investments. Common reasons include business expansion, meeting working capital requirements, funding medical emergencies, higher education expenses, or managing short-term cash flow gaps while retaining ownership of the shares.

Can I use the loan against shares for personal goals like weddings or travel?

Yes, loans against shares can be used for personal goals such as weddings, travel, home renovation, or large purchases. Since it’s a secured loan, lenders usually do not restrict usage, making it a flexible financing option for both planned and unplanned expenses.

Is there any restriction on how I can use the loan amount?

Generally, there are no strict restrictions on how you use the loan amount, unless specified by the lender. You can utilise the funds for personal or business purposes. However, using the loan for speculative trading or unlawful activities is strictly prohibited under lender and regulatory guidelines.

Show More Show Less

Related videos