Eligibility criteria and documents required
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.
Eligibility criteria
- Nationality: Indian
- Age: 18 to 90 years
- Employment: Salaried, self-employed
- Security value: Minimum Rs. 50,000
Documents
- KYC documents: Aadhaar/ passport/ voter’s ID
- PAN card
- DEMAT Holding Statement
Corporates/ HUF/ LLP/ Partnership/ Trust/ Sole Proprietorship can apply for loan against shares of up to Rs. 1000 crore, by reaching us at las.support@bajajfinserv.in.
How to apply for a loan against shares
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Frequently asked questions
The eligibility criteria for loan against shares with Bajaj Finance are:
- You must be an Indian citizen.
- Your age should be between 18 to 90 years.
- You must either be Salaried, or self-employed.
- You must have a minimum security worth Rs. 50,000.
To apply for loan against shares, click on the ‘Apply’ button on the page. You will be redirected to our form, where you will have to fill your personal details and the value of your shares.
Once all your details have been verified through an OTP, sent on your phone, our representative will contact you for further processing of your application.
Through the loan against shares by Bajaj Finance, you can get a pre assigned loan of Rs. 10,000 to Rs. 5 crore.
All individuals: both self employed or salaried are eligible for online loan against shares with Bajaj Finance.
Corporates/ HUF/ LLP/ Partnership can apply for loan against shares of up to Rs. 1000 crore, by reaching us at las.support@bajajfinserv.in.
The documents required to apply for loan against shares with Bajaj Finance are:
- PAN Card
- One KYC documents from Aadhaar, passport or voter’s ID
- Demat holding statement that gives an account of the shares and securities you have traded in a given period.
A loan against shares offers several benefits, including liquidity without selling assets, enabling investors to meet immediate financial needs. Interest rates are often lower compared to unsecured loans, making it a cost-effective solution. Additionally, borrowers retain ownership of the shares, participating in potential market gains.
The RBI guidelines for availing loans against securities include:
- Eligible securities: The RBI guidelines for loans against shares categorise securities into Group I, II, and III based on trading frequency and the cost impact of trades over the past six months. This categorisation helps define the types of assets eligible as collateral.
- Loan to value (LTV) ratio: The LTV ratio is generally capped at 50% for shares and can vary for other securities.
- Margin requirements: Banks must maintain a specific margin and are required to adjust the loan value if the security value declines.
- Borrower eligibility: The borrower must adhere to KYC norms and have a satisfactory credit history.
- End-use restrictions: Loan funds typically should not be used for speculative purposes or to buy additional shares.
The act of taking a loan against shares is not taxable because it is a debt and not an income. However, if the borrowed funds are invested and generate income, that income (e.g., interest, dividends) may be taxable according to the relevant income tax laws. Additionally, if shares are sold to repay the loan, any capital gains from the sale of shares will be subject to capital gains tax based on the holding period and applicable rates. It is important to consult with a tax professional to understand specific liabilities based on how the loan funds are used.
