Introduction to Asset-Based Loans

Discover how you can borrow up to 80% of the asset value with an asset-based loan.
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3 mins
17-July-2025

Why let your valuable assets sit idle when they could help you raise funds without selling them? Asset-based loans (also called asset-backed loans or simply asset loans) let you borrow money by pledging your existing assets like shares, real estate, or gold. This type of asset lending gives you quick access to cash, while your investments stay intact and may even continue to grow in value. Whether you are a business owner looking to scale, an investor ready to grab a new opportunity, or simply someone facing a short-term emergency, an asset-based loan can be a practical, low-stress way to raise funds.

Need quick funds? Pledge your shares or bonds and get instant cash, without selling them. Apply now

What is an asset-based loan?

An asset-based loan is a type of secured loan where you borrow against something you already own—like stocks, mutual funds, property, gold, or insurance. The lender evaluates your asset and then offers a loan based on its current market value.

These loans are useful for people or businesses who may not qualify for regular loans due to low credit scores or unstable cash flow but still have valuable assets. You keep ownership of your asset during the loan period, and once you repay the loan, the asset is fully yours again.

How asset-based loans work?

Let us understand how it usually goes:

  1. Asset evaluation – First, the lender (or their valuation expert) assesses your asset's current market value.
  2. Loan offer – Based on that value, you get a loan offer. This is usually a percentage of the asset’s worth say 50% depending on the asset type.
  3. Pledging the asset – You pledge your asset as collateral. If you default, the lender can sell it to recover the loan.
  4. Repayment – You repay the loan in instalments or as agreed. Once it’s paid off, your asset is released back to you.

Keep your investments intact. Get a loan without selling your stocks or mutual funds. Apply now

Common types of loan against assets

Here are some typical asset-backed lending options available today:

  • Loan against shares, bonds, and mutual funds
  • Loan against commercial or residential property
  • Loan against ULIP and endowment insurance policies
  • Loan against gold or valuables
  • Loan against vehicles

In some cases, even business receivables and inventory can be used as collateral.

Need funds fast? Use your shares as collateral and get a quick loan. Apply now

Benefits of asset-based loans

Asset loans come with a long list of advantages. Here are the most important ones:

  1.  Access to quick cash – The process is fast, and funds are usually disbursed quickly after asset verification.
  2. No need to sell your investments – Your shares or mutual funds stay with you. If the market grows, so do your holdings.
  3. Easier approval – Even if your credit score isn’t ideal, your asset can help secure a loan.
  4. Flexible loan amount – The loan size changes based on your asset value, which is helpful if your portfolio value rises.
  5. Perfect for businesses – Great for managing working capital, paying suppliers, or funding short-term goals.
Loan Against Shares
Loan Against Mutual Funds

How asset-based loans work

Who can get an asset-based loan?

Getting a loan against asset is relatively straightforward, but you will need to meet a few conditions:

  • You must own a valuable asset – This could be property, investments, or gold.
  • Clear ownership – You must have full ownership. No shared claims or ongoing disputes.
  • Valuation approval – The lender must be satisfied with the asset’s current value.
  • Clean title – The asset must be free of any legal issues or liens.
  • For businesses – Financial documents may be required to check your repayment ability.
  • Some credit checks may still apply, especially for high-value loans

Once everything is in place, the funds are transferred quickly, often within 48 hours.

A quick example: Rahul’s story

Rahul urgently needs Rs. 1 lakh for medical expenses. Instead of selling his investments, he approaches a lender and pledges part of his mutual fund portfolio worth Rs. 1.6 lakh.

The lender offers him a loan against securities, approving 50% of the value Rs. 80,000, within 24-48 hours. Rahul gets the funds he needs while keeping his investments intact. Later, as the market improves, his portfolio continues to grow in value.

Things to keep in mind before borrowing

Before going for an asset-backed loan, consider the following:

  • If you default, your asset may be seized – Especially important to remember if you’re pledging long-term assets like property or shares.

  • Interest rates and processing charges apply – These can vary from lender to lender.

  • Loan-to-value ratio – You won’t get 100% of the asset’s value. Lenders usually offer up to 75–80% based on risk.

  • Market risk (for investments) – If your shares drop in value, you may be asked to pledge more or repay partially.

Final thoughts

An asset-based loan is a simple, flexible, and reliable way to unlock the value of what you already own. Instead of selling your assets, you borrow against them keeping ownership and staying financially agile. Whether it is expanding your business, meeting urgent expenses, or grabbing a new investment opportunity, an asset loan lets you act quickly and responsibly. Just make sure to understand the terms, repayment plans, and what happens in case of default. Used wisely, asset lending can help you achieve more without having to part with what you’ve worked hard to build.

Do not sell your investments. Get a secured loan against securities in no time. Apply now

Frequently asked questions

Can we take loans on assets?

Yes, you can take loans on assets through asset-based lending. This type of loan uses your assets, such as real estate, equipment, inventory, securities, or accounts receivable, as collateral to secure the loan. The loan amount is determined by the value of your pledged assets, making it a flexible solution for those needing quick capital.

Leverage your securities to get a loan against them! Apply now

Which assets are best to avail a loan?

Assets with an assessable value, like securities, real estate, or valuable equipment, are ideal for availing a loan. Lenders prefer assets that can be easily evaluated and liquidated in case of default.

What is the repayment tenure for a loan against assets?

Repayment tenures for loans against assets vary depending on the lender and the type of asset. Typically, these loans offer flexible repayment terms, which can range from a few months to several years, depending on the terms and conditions of the loan which may be incorporated in loan documents executed between the borrower and the lender.

Is a loan against assets cheaper than a personal loan?

In many cases, a loan against assets can be more cost-effective than a personal loan. The interest rates for asset-based loans are often lower because they are secured by collateral. However, the actual cost depends on the specific terms, the type of asset, and the lender's policies, so it is essential to compare options to determine the most cost-effective solution for your financial needs.

How much can I borrow against my assets?

The amount you can borrow against your assets depends on the type and value of the assets you offer as collateral. Lenders typically finance a percentage of the asset's market value, known as the loan-to-value (LTV) ratio. This ratio varies by asset type and lender policies but commonly ranges from 50% to 80%. For example, if you have an investment portfolio valued at Rs. 1,60,000 and the lender offers a 50% LTV ratio, you can borrow Rs. 80,000. The exact amount will be determined after the lender appraises your assets.

What happens if I can’t repay my asset-based loan?

If you fail to repay, the lender may seize and sell the asset to recover the outstanding amount. Any remaining shortfall remains your responsibility.

What is an asset-based loan and how does it work?

An asset-based loan is a secured loan where lenders provide funds based on the value of assets like shares, mutual funds, or insurance. The asset remains in your name but is pledged as collateral.

Can I get a loan against my insurance policy?

Yes, you can avail a loan against select insurance policies with a surrender value. The policy acts as collateral, and you continue to stay covered while accessing funds without liquidating your insurance plan.

How do I apply for a loan against assets with Bajaj Finserv?

Visit the Bajaj Finserv website, select the ‘Loan Against Securities’ option, fill in your details, upload documents, and get quick approval. The process is online, fast, and requires minimal paperwork.

What is the difference between a fund-based loan and an asset-based loan?

A fund-based loan provides direct credit (like cash credit or overdraft), often unsecured. An asset-based loan, however, is secured against assets like securities or insurance and offers funds based on asset value.

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