What is Loan Against Securities?

Know how a loan against securities helps you borrow money by pledging your financial assets without selling them.
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3 mins
22-January-2026

Looking to raise funds without breaking your investments? A loan against securities could be the smart, low-risk solution you’ve been searching for. Whether you're planning to grow your business, grab an unexpected opportunity, or manage personal expenses, lending against your financial assets can give you access to instant liquidity without selling a single share or bond.

Get instant liquidity from your portfolio without disrupting your long-term returns. Apply for a Loan Against Securities

What is a loan against securities?

A loan against securities is a type of secured loan where you pledge your financial investments like shares, mutual funds, bonds, or insurance policies as collateral to get funds. Instead of selling these investments, you simply pledge them, continue to earn returns on them, and get a line of credit that you can tap into whenever needed.

It’s like having your cake and eating it too you retain your investments and still get access to cash when you need it.

Did you know? You can borrow up to 80–90% of the market value of your securities depending on the type. That’s substantial liquidity at your fingertips.

How a Loan Against Securities (LAS) differs from other loans?

Wondering how a loan against securities stacks up against a personal loan? Let’s break it down:

Feature

Loan against securities

Other loan

Collateral

Required (Shares, MFs, Bonds, etc.)

Not required

Loan amount

Based on LTV of pledged securities

Based on income, credit score

Interest rate

Lower than unsecured loan

Generally higher than loan against securities

Use case

Working capital, investments, emergencies

Weddings, travel, medical, etc.


Lower rates, faster access, and minimal paperwork a LAS is often more cost-effective than unsecured loans. Apply now

How do loans against securities work?

A loan against securities (LAS) is a simple and efficient way to access funds without liquidating your investments. Here's how the process typically unfolds:

  1. Security valuation: The lender first assesses the type and market value of the securities you wish to pledge—be it shares, mutual funds, bonds, or insurance policies. Only approved and liquid securities are considered.
  2. Loan approval: Based on the valuation, the lender calculates the eligible loan amount using a Loan-to-Value (LTV) ratio. The final offer depends on the type of security, market risks, and your credit profile.
  3. Loan disbursement: Once the terms are accepted and documents verified, your securities are pledged, and the approved loan amount is credited to your bank account—often within 24 to 48 hours.
  4. Repayment: You can repay the loan as per the agreed schedule. Many LAS options offer flexible interest-only payments during the tenure, with the principal repaid at the end. Once repaid, your securities are unpledged.

Read more: loan against security stamp duty

What is digital loan against securities?

A digital loan against securities (LAS) is a secured loan that lets you borrow funds by pledging your existing financial investments such as shares, mutual funds, entirely online. The application, pledge creation, approval, and disbursal are completed digitally, without paperwork or branch visits, while you continue to retain ownership of your investments. Here are the key features explained:

  • Fully online journey: Application, KYC, pledge marking, and documentation are completed digitally.
  • Quick access to funds: Faster approvals and disbursals compared to traditional loan processes.
  • Lower interest rates: Since the loan is secured by securities, rates are usually lower than unsecured loans.
  • Flexible usage: Funds can be used for personal or business needs (non-speculative, as per regulations).
  • Ownership retained: You keep market exposure and benefits like dividends, subject to lender terms.
  • Dynamic loan limits: Borrowing power depends on the loan-to-value (LTV) of pledged securities and market movements.
  • Transparent management: Digital dashboards allow you to track pledged assets, interest, repayments, and margin status in real time.

Overall, a digital LAS combines speed, convenience, and cost-efficiency, making it a practical liquidity option for investors who don’t want to sell their long-term holdings.

Loan Against Shares
Loan Against Mutual Funds

What are the benefits of a loan against securities?

Here’s why thousands of investors prefer lending against securities over liquidating them:

  • Lower interest rates: Interest typically ranges from 8% to 12% per annum, far lower than most unsecured loans.
  • Earn while you borrow: Continue to earn dividends or capital appreciation while your assets are pledged.
  • Pay interest only on what you use: Works like an overdraft pay interest only on withdrawn amounts.
  • Flexible repayment: Pay just the monthly interest or prepay anytime zero to minimal foreclosure charges depending on the variant.
  • Minimal eligibility: Indian citizens above 21 with securities in demat format can apply.
  • 24/7 account access: Track your loan account or contact customer support at your convenience.

Why sell your investments when you can borrow against them? Apply now and enjoy flexible withdrawals and lower interest rates.

Eligibility criteria for loan against securities

Getting started with a Loan Against Securities is simpler than you may think. If you have investments and a steady income, you're likely eligible. Here's what most lenders, typically require:

  • Citizenship and age: You must be an Indian citizen and at least 21 years of age at the time of application.
  • Eligible securities: You should own approved financial instruments such as mutual funds, listed shares, bonds, or other marketable securities.
  • Demat account: Your securities must be held in a demat account (for shares) or mutual fund folio that can be pledged electronically.
  • Income proof: A regular source of income helps verify your repayment capacity and is often needed for KYC and credit checks.

Already have a mutual fund or demat account? You are halfway through the eligibility process. Check eligibility

Fees and charges involved in a LAS

While a Loan Against Securities is generally more affordable than unsecured credit, it’s important to know the potential charges involved. Here’s a breakdown:

  • Interest rate: Typically starts from 8% to 15 % per annum and varies based on the lender, your credit profile, and the type of security pledged.
  • Processing fee: A nominal one-time fee is charged for setting up the loan and completing documentation.
  • Prepayment or foreclosure charges: These depend on the type of variant you opt for, it’s best to confirm in advance with your lender.
  • Penalties: Charges may apply for missed EMIs, late payments, or failure to maintain required margins.

What affects your interest rate?

The interest rate on a LAS isn’t fixed like a personal loan it’s dynamic and depends on multiple factors. Here’s what typically influences it:

  • Market conditions: Prevailing repo rates and liquidity in the financial market affect the base rate.
  • Your credit profile: A high credit score and stable income improve your chances of getting a lower rate.
  • Type of security: Blue-chip stocks or AAA-rated bonds can fetch you better terms compared to less liquid or high-risk assets.
  • Loan amount and tenure: Larger amounts or shorter terms may influence your rate, either positively or negatively.
  • Loan-to-Value ratio (LTV): A lower LTV reduces the lender’s risk, which may lead to a more competitive interest rate.

Looking for the best rate? Choose high-value, liquid securities. Use our online LAS calculator to see the rates you may qualify for.

Features of a loan against securities

LAS is a preferred choice for both salaried professionals and business owners, thanks to its versatile and user-friendly features:

  • Instant liquidity: Raise funds without selling or redeeming your long-term investments.
  • Portfolio retention: Continue earning returns, dividends, or capital gains while your securities remain intact.
  • Flexible repayment: Many lenders allow interest-only EMIs, bullet repayment, or part prepayments.
  • Digital convenience: Manage your loan, check statements, and request top-ups from your online dashboard.
  • Top-up facility: Need more funds later? Use the same securities to get additional credit without reapplying.

Liquidity, flexibility, and control, a LAS gives you all three. Apply now to get started

Things to consider before you apply

Before pledging your portfolio for a loan, it’s wise to assess a few key factors:

  • Interest rates and charges: Compare rates, processing fees, and penalties across lenders.
  • LTV ratio: Understand how much loan value you can get against your portfolio and which securities offer better leverage.
  • Risk of margin calls: If the market value of your pledged securities drops significantly, the lender may ask you to top up your collateral or repay part of the loan.
  • Repayment flexibility: Choose a lender that allows easy prepayment, part-payment, and offers interest-only EMI plans.

When should you take a loan against securities?

A loan against securities works best when you need quick liquidity but want to stay invested. It helps you access funds without selling your shares or mutual funds, making it suitable for short-term or urgent needs. You should consider it when:

  • You need immediate funds without disturbing long-term investments.
  • Markets are down and selling your portfolio would cause losses.
  • You want a lower-cost alternative to unsecured loans.
  • You prefer paying interest only on the amount you withdraw.
  • You want a flexible credit line for recurring or short-term expenses.

What securities can be pledged?

Not all financial instruments qualify for a LAS, but a wide range of securities are generally accepted. These include:

  • Loan against shares: Listed equity shares held in your demat account, preferably from the approved list of stocks.
  • Loan against mutual funds: Both debt and equity mutual fund schemes from SEBI-approved fund houses.
  • Loan against bonds: Government bonds, corporate bonds, and other listed fixed-income securities that meet the lender’s criteria.

How to apply for a loan against securities?

Applying for a LAS is now quicker than ever. Choose between a fully digital or offline method based on your convenience.

  1. Visit the Loan Against Securities page.
  2. Select your preferred variant of loan against securities to be pledged then click on it.
  3. Click on ‘Apply Now’ and enter your mobile number to begin.
  4. Complete OTP verification and fill out the short application form.
  5. Fill up the form and complete the KYC and documentation process.
  6. Upload your documents digitally and submit the form.

Repayment options for loan against securities

A loan against securities offers flexible repayment structures, allowing borrowers to manage cash flows efficiently without disturbing long-term investments. The repayment option chosen typically depends on income patterns, loan tenure, and the lender’s policy. Common repayment options include:

  • Interest-only payments: Pay only the interest periodically (monthly/quarterly), with the principal repaid at the end of the tenure.
  • EMI-based repayment: Repay both principal and interest through regular EMIs, suitable for predictable income streams.
  • Overdraft or credit line model: Withdraw and repay funds as needed and pay interest only on the utilised amount.
  • Part-prepayment flexibility: Make partial repayments anytime to reduce interest burden, often without foreclosure charges.
  • Bullet repayment: Repay the entire principal in one go at maturity, commonly used by investors expecting future inflows.

Risks involved in loan against securities

While a loan against securities is cost-effective and convenient, it carries certain risks that borrowers should clearly understand before pledging investments. Here are the key risks to be aware of:

  • Market volatility risk: A fall in the value of pledged securities can reduce loan coverage.
  • Margin call risk: If security values drop below the required threshold, you may need to provide additional collateral or repay part of the loan.
  • Forced liquidation risk: Failure to meet margin calls can lead to the lender selling pledged securities.
  • Interest rate variability: Some loans have floating interest rates, which may increase overall borrowing cost.
  • Liquidity pressure: Sudden repayment demands during market downturns can strain cash flows.
  • Restricted usage: Loan proceeds cannot be used for speculative trading or prohibited purposes under regulations.

Understanding these risks helps borrowers use loan against securities strategically, ensuring liquidity without compromising long-term financial goals.

Conclusion

A loan against securities is one of the smartest ways to raise funds especially if you don’t want to disturb your long-term investments. From lower interest rates to flexible repayments and continued returns on your assets, this financing option delivers value on multiple fronts. Whether you are an entrepreneur eyeing an opportunity or an individual managing short-term cash flow, lending against securities offers a fast, flexible, and low-cost route to liquidity.

Get the funds you need while your investments continue to grow. Apply now

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Frequently asked questions

Can I avail a loan against securities without a CIBIL Score?

In many cases, a strong CIBIL Score is not a strict requirement for loans against securities. These loans are typically collateralised by securities, which reduce the lender's risk. However, some lenders may consider your credit score in assessing the terms and interest rates. A lower credit score might result in less favourable loan terms, but it does not necessarily disqualify you from getting a loan against securities.

How much will the loan against securities cost me?

Fees and charges involved with loan against securities include interest rates, processing fees, annual maintenance charges.

  • Interest rate: The interest rate for loans against securities is generally lower than unsecured loans, making it a cost-effective borrowing option.
  • Processing fees: Lenders often charge a one-time processing fee when the loan is approved. The amount can vary between lenders.
  • Annual maintenance charges: Lenders might levy annual maintenance charges to cover the costs of managing your collateral.

These charges can vary between lenders and securities types. It is important to review the terms and conditions of the specific loan agreement to understand the exact costs involved.

How much loan amount can I get against my securities?

The loan-to-value ratio for loans against securities varies depending on the lender, type of collateral, and other factors. Bajaj Finance offers different loan-to-value ratios for shares (up to 50%), bonds (up to 95%), and mutual funds (up to 90%).

Is a loan against securities secured or unsecured?

A loan against securities is a type of secured loan. Secured loans are backed by tangible assets or collateral provided by the borrower.

What is the limit of loan against securities with Bajaj Finserv?

The limit of loan against securities with Bajaj Finserv is upto Rs. 1000 Crores.

Why choose the Loan Against Securities from Bajaj Finserv?

Bajaj Finserv offers a convenient and efficient Loan Against Securities experience. With end-to-end online processing, from KYC to e-mandate, and a fast-track application with quick disbursal, you can access funds quickly. Explore personalized pre-approved offers and manage your loan conveniently through online self-service options. Backed by a trusted brand and a wide network, Bajaj Finserv provides a seamless and customer-centric loan experience.

Which types of securities can I pledge for a loan?

You can pledge shares, mutual funds, bonds, and insurance policies as collateral for a loan. The loan amount depends on the market value of these pledged securities.

Can I apply for a loan against securities online?

Yes, you can apply online by visiting the lender's website, filling out the application form, and submitting the required documents. The process is designed for convenience and efficiency.

How long does it take to get approval for a loan against securities?

Approval times typically range from 24 to 48 hours, depending on the lender and the completeness of your application. Quick verification of pledged securities and documents can expedite the process.

What happens if the value of my pledged securities drops?

If the market value of your pledged securities declines, the lender may request additional collateral or partial repayment to maintain the required loan-to-value ratio. This is to mitigate the increased risk associated with the decreased value of the collateral.

Can I prepay my loan against securities before the tenure ends?

Yes, you can prepay your loan against securities at any time during the tenure. Most lenders do not charge any foreclosure or prepayment fees for such facilities.

Will my pledged securities earn returns during the loan tenure?

Yes, you will continue to receive any dividends, interest, or capital gains on the pledged securities during the loan tenure, since the ownership remains with you even while the securities are pledged.

What is the tenure for a loan against securities?

The loan tenure typically ranges from 7 days to 36 months. Tenure flexibility may vary depending on the lender's policy and can often be renewed upon review.

What types of securities can be pledged for a loan?

You can pledge listed shares, mutual funds, bonds, debentures, and select life insurance policies like ULIPs and endowment plans. These assets must be approved by the lender and held in demat or statement form. Each lender maintains a list of eligible securities.

How much can I borrow against my securities?

The loan amount typically ranges from 50% to 90% of the market value of your pledged securities, depending on the type and risk profile. For example, listed shares might fetch 50–60%, while debt mutual funds or insurance policies may allow higher leverage.

Are interest rates lower than traditional personal loans?

Yes, loans against securities usually have lower interest rates than unsecured personal loans because they’re backed by collateral. Rates can range between 8% and 15% annually, depending on the security type and lender, while unsecured loans may go upwards of 15% to 24%.

Do I continue earning dividends or interest while the loan runs?

Yes, you continue to receive dividends, bonuses, and interest income on your pledged securities. However, the lender holds lien only over the asset, not the returns it generates so all earnings during the loan tenure remain yours, unless you default on repayment.

How can I close LAS?

You can close your LAS account by repaying the outstanding amount along with any applicable charges. Once the repayment is completed, your pledged securities are released and returned to your demat or mutual fund account.

Can I foreclose my loan against securities account?

Yes, you can foreclose your LAS account by paying the entire outstanding loan amount before the end of the tenure. After foreclosure, the lender releases your pledged securities back to your account.

Can I pre-pay my LAS?

Yes, you can pre-pay your LAS partially or fully at any time. Pre-payment helps reduce your interest outflow, as interest is charged only on the utilised amount, not the full sanction limit.

What happens if I fail to repay the LAS on time?

If you fail to repay on time, interest and penalties may apply. The lender may sell a portion of your pledged securities to recover dues, especially if the security value falls below the required margin.

What documents are required to apply for a loan against securities?

You typically need identity and address proof, PAN card, bank account details, and proof of ownership of securities. KYC documents are mandatory, along with demat account details for pledging eligible shares or mutual funds.

Can NRIs apply for loan against securities in India?

No, NRIs are generally not eligible to apply for a loan against securities in India. Most lenders restrict this facility to resident Indians due to RBI regulations, operational limitations, and compliance requirements related to pledging and monitoring securities.

How quickly is the loan amount disbursed?

Loan disbursal is usually quick once securities are pledged successfully. In many cases, funds are credited within 24 to 48 hours, subject to verification, documentation completion, and market operating hours.

What happens if I default on my loan against securities?

If you default, the lender may initiate margin calls or sell pledged securities to recover dues. Continued non-payment can lead to loss of investments, additional charges, and a negative impact on your credit profile.

Can I pledge mutual funds held in non-demat formats?

Generally, only mutual funds held in demat form are eligible for pledging. Physical or non-demat mutual fund holdings usually need to be converted into demat format before they can be considered for a loan.

Are personal loans better than loan against securities?

Personal loans offer flexibility without collateral but usually have higher interest rates. Loans against securities are secured, typically come with lower interest rates, and are more cost-effective if you own eligible investments.

How is the loan amount calculated based on market value fluctuations?

The loan amount is based on the current market value of pledged securities and the applicable loan-to-value ratio. If market values fall, lenders may reduce limits or issue margin calls to maintain required coverage.

What is the minimum loan amount for loan against securities?

The minimum loan amount varies by lender but is generally lower than many unsecured loans. It depends on the value and type of securities pledged and the lender’s internal eligibility criteria.

How can I track my loan against securities account online?

You can track your loan through the lender’s online portal or mobile app. These platforms usually show outstanding balance, interest charged, margin status, pledged securities, and repayment details in real time.

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