How to Apply for Loan Against Securities

The eligibility requirements are based on the borrower and securities offered as collateral.

• Nationality: The applicant should be an Indian citizen. 
• Age: Primary borrowers can generally be between 21 and 90 years. 
• Employment: Salaried and self-employed individuals can apply for applicable facilities. 
• Security value: The minimum portfolio value for Loan Against Shares is Rs. 50,000. 
• Security eligibility: The shares or mutual funds must appear on the approved list.
• Ownership: The borrower must have eligible ownership of the securities being pledged.
• KYC: Required identity and address verification must be completed.

• Credit assessment: Approval remains subject to the lender's applicable assessment and terms.

  
  

Eligibility requirements can differ between Loan Against Shares, Mutual Funds, Bonds, and Insurance facilities.

Understanding how to apply for a Loan Against Securities helps you prepare before starting the application.

1. Choose your lender: Compare applicable interest rates, LTV, charges, tenure, and eligible securities.
2. Start the application: Visit the Bajaj Finance website and select the relevant Loan Against Securities facility.
3. Verify your mobile number: Enter your registered mobile number and complete OTP authentication.
4. Provide basic details: Enter your PAN, date of birth, email address, and other requested information.
5. Add securities: Enter the security names and quantities you want to pledge.
6. Check eligibility: The lender evaluates your securities and generates an applicable loan offer.
7. Complete KYC: Submit documents through DigiLocker or the applicable upload facility. 
8. Enter bank details: Provide and verify the bank account for disbursal.
9. Complete e-agreement and e-mandate: Authenticate the required agreements and repayment mandate.
10. Pledge securities: Complete the applicable pledge process for the approved securities.
11. Receive funds: The loan is disbursed after successful pledge creation and verification. 

Need funds urgently? Apply for a loan against securities online and enjoy instant disbursal within days.

Having the required documents ready can make the application process smoother.

• PAN card: Used for identity and financial verification.
• Identity proof: Aadhaar, passport, driving licence, or voter identity card may be accepted.
• Address proof: Accepted KYC documents can verify the applicant's residential address.
• Demat holding statement: Required for relevant securities-backed facilities.
• Security documents: Investment-related records may be required for verification.
• Photograph: A recent passport-size photograph may be required.
• Income documents: Additional income information can apply depending on the applicant and facility. 

• No immediate sale: Access funds without immediately liquidating eligible shares or mutual funds.
• Continued ownership: The borrower generally retains ownership while securities remain pledged.
• Potentially competitive borrowing cost: Secured borrowing can offer competitive pricing compared with some unsecured options.
• Portfolio continuity: Eligible investments can remain invested during the loan period.
• Customised borrowing: The sanctioned amount depends on eligible collateral value and applicable LTV.
• Digital processing: Bajaj Finance offers an online application process for eligible facilities.
• Interest on utilisation: For applicable mutual fund facilities, interest is payable on the amount utilised. 

These advantages make securities-backed borrowing useful when liquidity is temporary.

However, market-linked collateral remains exposed to price fluctuations throughout the facility.

Over-leveraging

Do not borrow simply because your portfolio supports a larger sanctioned limit.

Borrow according to your actual financial requirement and repayment capacity.

Ignoring the approved-security list

Not every listed share or mutual fund automatically qualifies.

Check the lender's current approved list before starting your application.

Overlooking LTV

LTV: LTV determines the proportion of eligible security value available for borrowing.

Bajaj Finance currently offers up to 50% against eligible shares. 

Ignoring market volatility

A fall in pledged-security value can reduce your available borrowing limit.

Bajaj Finance states that mutual fund loan limits can move with changes in fund values. 

Missing repayment obligations

Delayed repayment can increase costs and create pressure on pledged investments.

Skipping the terms and conditions

Review interest, charges, tenure, LTV, pledge conditions, and default provisions before accepting the facility.

The Loan-to-Value ratio determines how much you can borrow against eligible securities.

LTV: LTV is the percentage of eligible collateral value considered for lending.

For example, shares worth Rs. 10 lakh at 50% LTV can support borrowing of up to Rs. 5 lakh.
 

The actual sanctioned amount remains subject to lender assessment and applicable terms.

LTV can differ according to security type and applicable product conditions.
 

Therefore, borrowers should check the specific LTV before deciding the amount to borrow.

Following factors should be considered before applying for loan against securities: 

• Current market conditions: Falling security prices can reduce collateral value.
• Repayment capacity: Ensure the interest and principal obligations fit your cash flow.
• Loan purpose: Borrow for a clearly defined financial requirement.
• LTV: Check how much of your portfolio can actually support borrowing.
• Interest and charges: Compare the complete borrowing cost.
• Tenure: Select a period aligned with your expected repayment ability.
• Collateral risk: Understand what happens if security values decline.
• Pledge restrictions: Check whether transactions involving pledged securities will be restricted.
• Prepayment conditions: Review applicable prepayment or foreclosure terms.

Unlike personal loans or credit cards, a loan against securities allows you to borrow at lower interest rates, with flexible terms and minimal documentation. Moreover, your investments continue to grow, offering both liquidity and wealth retention something traditional loans cannot match.

Knowing how to apply for a Loan Against Securities can simplify the borrowing process. The key stages include checking eligibility, selecting approved securities, completing KYC, and pledging collateral.  mutual funds.  Borrowers should monitor their pledged investments throughout the loan period. A decline in collateral value can affect the available loan limit. Used responsibly, a Loan Against Securities can provide liquidity without requiring immediate sale of eligible investments.

Turn your portfolio into a ready source of liquidity. Apply for a loan against securities today and meet your financial goals without giving up your investments.