₹25,000 - ₹50 Cr
Get up to 50% of your share portfolio's value as a loan | Flexible tenure of up to 36 months to suit your needs
Loan Against Equity Shares
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In summary
A Loan Against Shares can convert eligible equity holdings into a borrowing limit while you remain invested. However, the facility still carries interest, repayment obligations and market-linked collateral risk.
- Borrow ₹25,000 to ₹50 Cr.
- LTV stays capped at 50% of value.
- Interest ranges from 7%–12.25% per annum.
- Choose flexible 7-day to 36-month tenures.
- Only approved demat-held shares can qualify.
Falling prices can create margin shortfalls.
Bajaj Finance currently accepts more than 1,000 approved shares. Approval, rates and disbursal remain subject to verification and applicable terms. Check the approved list, Key Facts Statement and sanction letter before accepting the facility.
What is a loan against equity shares?
Loan Against Equity Shares
A loan against equity shares is a secured borrowing facility. You pledge eligible listed shares as collateral, and the lender provides a borrowing limit based on their current market value. You remain the owner of the shares while they are pledged. You may also continue receiving applicable dividends. However, you cannot treat pledged shares as freely available holdings. Selling, transferring, or replacing them usually requires the pledge to be released or adjusted under the facility’s terms. Moreover, this type of loan is usually opted by high-net-worth individuals seeking liquidity for short term requirements. The lender may invoke the pledge and sell the shares if you do not repay the dues or restore a required collateral shortfall.
Loan-to-Value (LTV) and interest rates
What is the LTV ratio and interest rate on a loan against equity shares?
For a loan against equity shares, the loan against shares LTV ratio in India is capped at 50% under RBI rules, while Bajaj Finance currently lists interest rates of 7%–12.25% p.a. SEBI regulates the securities market, but the lending-related LTV requirement comes from the RBI. Therefore, shares worth Rs. 10 lakh may support a loan of up to Rs. 5 lakh, subject to valuation, eligibility, and approval.
| Parameter | Current limit or range | How it works | What it means for you |
|---|---|---|---|
| LTV ratio | Up to 50% | Loan cannot exceed the applicable proportion of pledged-share value | Rs. 10 lakh in eligible shares may support up to Rs. 5 lakh |
| Interest rate | 7%–12.25% p.a. | Interest applies only to the amount drawn | Compare the applicable rate and total borrowing cost |
| Loan range | ₹25,000 to ₹50 Cr. | Depends on share value, eligibility, and assessment | The sanctioned amount may be lower than requested |
| Margin shortfall | Triggered when LTV exceeds 50% | The lender issues a shortfall notice under the facility terms | Part-repay or pledge additional approved shares within 7 business days |
If falling share prices push the LTV above 50% , failure to correct the shortfall may lead to the sale of pledged shares under the loan terms.
How does borrowing against shares work?
A Loan Against Shares works through an electronic pledge over approved shares held in your demat account.
The usual process involves the following stages:
- Select eligible shares: Identify holdings appearing on the lender’s approved list.
- Check the available limit: The lender values the selected shares and applies the permitted Loan-to-Value ratio.
- Complete the application: Provide the requested personal, KYC and demat details.
- Review the offer: Check the rate, charges, repayment terms and collateral conditions.
- Confirm the pledge: Authorise the electronic pledge through the applicable demat and depository process.
- Access the approved funds: Withdraw an amount within your available drawing power.
- Maintain the facility: Pay applicable interest and monitor the pledged portfolio.
Release the shares: Clear the outstanding dues and complete the release process.
Bajaj Finance states that interest is charged only on the amount withdrawn and for the period it remains utilised, rather than on the unused limit.
Features & benefits of loan against equity shares
The main purpose of this facility is to access funds without immediately selling eligible investments.
Potential features and benefits include:
- Continued ownership: The shares remain in your name unless the pledge is invoked.
- Applicable dividends: You may continue receiving dividends, subject to the facility terms.
- Usage-based interest: Interest applies to the amount withdrawn, not ordinarily to the unused limit.
- Flexible tenure: Bajaj Finance currently provides tenures from 7 days to 36 months.
- Changing drawing power: Your available limit may rise or fall with the eligible portfolio’s value.
Digital management: Statements and eligible service requests can be managed through the customer portal.
These features do not make borrowing automatically preferable to selling shares. Consider the interest cost, charges, repayment capacity and possibility of forced share liquidation.
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What documents are required for a loan against equity shares?
Eligibility criteria for Bajaj Finance loan against shares
A loan against equity shares is offered to individuals who hold eligible listed shares in their demat account. Since the loan is secured against your investments, the eligibility requirements are usually simpler and faster compared to unsecured loans.
Eligibility criteria
Individual applicants generally need to satisfy the following Bajaj Finance criteria:
- Nationality: Indian resident
- Age: 21–90 years years
- Employment: Salaried or self-employed
- Security value: At least ₹50,000 in eligible securities
- Co-borrower: Required when the primary borrower is over 70 years old
Holdings: Approved listed shares held in demat form
Meeting these conditions does not guarantee approval. The sanction depends on successful verification, eligible collateral, applicable LTV and the lender’s assessment.
Documents required
Bajaj Finance currently lists the following principal documents:
- PAN card
- Demat holding statement
- An accepted KYC document, such as Aadhaar, passport, driving licence or voter ID
- Additional information or documents requested during verification
Provide only accurate and current information. The lender may request further documents depending on the applicant, facility structure, or verification outcome.
How to apply for loan against equity shares?
You can generally complete the Loan Against Shares process online:
- Enter your personal and contact details.
- Allow the eligible demat holdings to be retrieved.
- Check the available borrowing limit.
- Choose an amount within that limit.
- Complete KYC and bank verification.
- Review the Key Facts Statement and agreement.
- Electronically sign the required documents.
- Authorise the pledge over approved shares.
Receive funds after successful approval and pledge confirmation.
Bajaj Finance states that eligible applications may receive funds in as little as 24 hours after successful completion and approval. This is not a guaranteed timeline and may vary with verification, documentation and pledge completion.
How much can you borrow against your equity shares?
If you are asking, “how much can I borrow against equity shares?”, Bajaj Finance may offer up to 50% of the market value of eligible shares, subject to RBI requirements, valuation, eligibility, and approval. The available loan range is ₹25,000 to ₹50 Cr. The loan against shares LTV ratio in India must be maintained at 50%.
| Portfolio value | Maximum loan at 50% LTV | Illustrative borrowing at 40% LTV |
|---|---|---|
| Rs. 5 lakh | Up to Rs. 2.5 lakh | Rs. 2 lakh |
| Rs. 10 lakh | Up to Rs. 5 lakh | Rs. 4 lakh |
| Rs. 50 lakh | Up to Rs. 25 lakh | Rs. 20 lakh |
Borrowing below the 50% limit can provide a buffer against market volatility and reduce margin-shortfall risk on a loan against equity shares.
Should you borrow or sell your shares?
Neither option is automatically better. The appropriate choice depends on your funding need, expected borrowing period, tax position, investment view and repayment capacity.
| Factor | Borrowing against shares | Selling shares |
| Ownership | You retain ownership while the pledge continues | Ownership ends after the sale |
| Interest | Interest and applicable charges apply | No borrowing interest applies |
| Market exposure | You remain exposed to gains and losses | Future price movements no longer affect sold shares |
| Repayment | Interest and principal obligations continue | No loan repayment obligation arises |
| Collateral risk | Price falls may create a shortfall | No collateral shortfall applies |
| Tax | Pledging itself is not a sale; later events may have tax implications | A sale may result in a taxable gain or recognised loss |
If you are considering this option, review the current Loan Against Shares terms, total borrowing cost and margin requirements before deciding.
What to avoid while availing of a loan against equity shares?
How to Secure a Rs. 2 Crore Loan Against Securities Instantly
A loan against equity shares can provide access to funds without selling eligible holdings. However, poor borrowing decisions may increase repayment pressure and the risk of pledged shares being sold.
- Pledging a concentrated portfolio: Holding only a few shares can increase margin-shortfall risk if their prices fall sharply.
- Borrowing the maximum available amount: Using the complete limit leaves less protection against market volatility.
- Ignoring the LTV ratio: Monitor your loan-to-value ratio regularly and act promptly if a shortfall occurs.
- Missing interest or repayment deadlines: Delayed payments may attract charges, affect your credit profile, and lead to recovery action.
- Assuming every share qualifies: Only shares appearing on the lender’s approved list can be pledged.
- Overlooking loan charges: Review the interest rate, processing fee, prepayment conditions, and other applicable costs.
Ignoring lender notifications: Respond to margin-shortfall notices within the specified period by part-repaying or pledging additional approved shares.
Borrow only what you can repay comfortably. An unresolved margin shortfall or payment default may allow the lender to invoke or sell pledged shares under the loan agreement.
Conclusion
A loan against equity shares can provide access to funds without requiring an immediate sale of eligible investments. The facility may help you remain invested, but it also creates interest costs, repayment duties and exposure to margin shortfalls. Before proceeding, check the approved shares, current LTV, total charges, repayment terms and consequences of falling collateral value. Compare these obligations with the financial and tax implications of selling shares. Base the decision on your repayment capacity rather than the maximum amount available.
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Frequently asked questions
Eligibility
Management
Charges
What is the limit of loan against equity shares?
The limit of a loan against equity shares depends on factors such as the value and volatility of the shares, borrower's creditworthiness, and lender's policies. Typically, lenders offer loans up to a certain percentage of the market value of the shares pledged as collateral.
How does a loan against equity shares differ from a loan against mutual funds?
The key difference between a loan against equity shares and a loan against mutual funds is the collateral pledged. A loan against shares, also called a loan against stocks, uses approved listed shares and may offer up to 50% LTV. Mutual fund LTV depends on the scheme: up to 50% for eligible equity funds and up to 90% for eligible debt funds, subject to lender policies.
What happens if share prices fall after taking the loan?
If share prices fall, the value of your pledged collateral decreases, which may breach the permitted Loan-to-Value (LTV) ratio. In such cases, the lender may issue a margin call asking you to either pledge more shares or partially repay the loan to restore the required LTV.
What is the minimum CIBIL score required for a loan against equity shares?
Bajaj Finance does not publicly specify one universal minimum CIBIL score for a loan against equity shares. For its loan against shares, eligibility depends on the pledged portfolio, applicant profile, documentation, and internal assessment. Because the facility is secured, collateral value is important, but credit history may still affect approval, the sanctioned limit, and the applicable interest rate.
Is interest charged only on the amount utilised?
Yes, interest is charged only on the amount you draw from the sanctioned loan limit, not the entire approved limit. This makes the loan against shares a cost-effective credit option, especially for short-term or flexible funding needs where you may not use the entire amount upfront.
What is a loan against equity shares and how does it work?
A loan against equity shares is a secured credit facility where you pledge eligible listed shares as collateral. The lender sets a credit limit based on share value, and interest is charged only on the amount you actually use.
How much can I borrow as a loan against my shares (LTV)?
The loan amount depends on the loan-to-value (LTV) ratio, usually capped at a fixed percentage of the shares’ current market value. The exact LTV varies by share type, volatility, and regulatory guidelines.
What interest rates apply to loans against equity shares?
Interest rates are generally lower than unsecured loans because shares act as collateral. Rates depend on market conditions, lender policies, share quality, and utilisation. Interest is typically charged only on the utilised loan amount.
Which securities are eligible for pledging?
Only approved, listed equity shares with adequate liquidity are accepted. Shares must be held in demat form and appear on the lender’s approved list. Illiquid, penny, or restricted stocks are usually not eligible.
Will I continue to receive dividends on pledged shares?
Yes. Even after pledging, you remain the owner of the shares. Dividends, bonuses, and other corporate actions are credited to your account, unless adjusted against dues as per the loan agreement.
How long does disbursal take after pledging shares?
Once shares are successfully pledged and documentation is completed, disbursal is usually quick. In most cases, funds are credited within the same day or within 24 working hours, subject to verification.
What is a margin call and how will I be notified?
A margin call occurs when the value of pledged shares falls below the required level. You are notified through SMS, email, or app alerts, asking you to restore the margin within a specified timeframe.
What options do I have if a margin call occurs?
You can meet a margin call by adding more eligible shares, repaying part of the outstanding loan, or providing additional funds. Timely action helps avoid forced sale of pledged securities.
Are there foreclosure or prepayment charges on these loans?
Many lenders allow part-prepayment or foreclosure without heavy penalties, especially for overdraft-style facilities. However, charges, if any, depend on the lender’s terms and should be checked in the loan agreement.
What happens if I default on the loan against shares?
If you fail to repay or respond to margin calls, the lender has the right to sell pledged shares to recover dues. Defaults may also impact your credit profile and future borrowing ability.
Is a loan against equity shares better than a personal loan?
Yes, a loan against equity shares suits investors seeking unrestricted funds while retaining ownership. Loan against shares costs 8%–15% p.a. versus 10%–24% for personal loans, making loan against securities cheaper.
Can I pledge shares and still trade them?
No, when you pledge equity shares for loan access, demat marking prevents sale or transfer until unpledged. Dividends and bonuses continue; loan against shares trading resumes after release.
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