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Loan Against Securities: What Should You Know About the Credit Facility

Loan against shares or securities is a utilitarian credit scheme which is designed to assist the borrowers stuck amidst varied financial emergencies. What makes the said credit scheme even more special? The credit scheme allows the borrower to mortgage their investment securities such as mutual fund bonds, insurance bond etc. and avail a loan against it while keeping their maturity value intact. Having said that, you should go to this facility only when there’s an immediate need for cash and you ain’t left with other options.


Also, before you apply for the loan, do mind to check a couple of things in advance. To start with, the interest rate. The interest rate for a loan against securities are connected with the market and hence, the same would go up or down as the market fluctuates.

loan against securities

Which type of securities can you mortgage?

Loan against securities, though, is offered against almost all types of government approved securities, but you must always make sure the bond or deposit certificate.

  • Doesn’t have a lock-in period.
  • The maturity value is higher, at least 40-50% more than your borrowing expectation.
  • You must be the owner or the nominee of the security used as collateral.

For better understanding, you can refer to the list of acceptable securities provided by the lender. Every lender has a specific list in which they mention the bonds/ investment certificate they accept as collateral for their particular credit scheme.

Last but not the least, some lenders such as Bajaj Finserv offers different kinds of loan against shares. For instance, flexible loan against securities, wherein the borrower is charged only for the money consumed.

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