Education and Career Forum

What is loan against shares/securities? How to apply for loans against securities?

It's a loan where you pledge your shared, mutual funds or life insurance policies as collateral to the bank against your loan amount.

HDFC Bank is the first bank to offer , Digital loan against mutual funds .

Loan against shares not to exceed Rs 10 lacs if the purpose is for subscribing to IPOs
Nature of the loan is overdraft.
One has to provide margin amount of 50% of prevailing market prices of the shared being offered as security.

Select securities and quantities from your Zerodha demat account against which you wish to avail the loan
Review and digitally sign the loan application
Wait for approval
Receive cash in your bank account.

Loan against securities is a loan where you pledge your shares, mutual funds or life insurance policies as collateral to the bank against your loan amount.

(Loans against shares not to exceed Rs 10 lacs if the purpose is for subscribing to IPOs.) Nature of Loan is Overdraft.

You will need to provide a margin amount of 50% of the prevailing market prices of the shares being offered as security. Pledge of the demat shares against which loan is sanctioned.

Loan Against Securities are typically offered as an overdraft facility in your account after you have deposited your securities. You can draw money from the account, and you pay interest only on the loan amount you use and for the period you use it.

For example, you are offered a loan against shares of Rs 2 lakhs. Let’s say, you draw Rs 50,000 and deposit the amount back in your account in one month. In this case, you are liable to pay interest only for one month on Rs 50,000.

Yes, you can certainly apply for Loan against securities in which you pledge your shares, mutual funds or life insurance policies as collateral to the bank against your loan amount.1
1)You can to your internet banking and then can select which you want to use as collateral towards bank and then accept agreement through a one-time password (OTP) after that Pledge shares with National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL) online by confirming OTP.

You are done with your application. The bank will go through your application and acknowledge you regarding the approval or denial.

What is loan against shares/securities? How to apply for loans against securities?

A loan against shares allows you to borrow money against listed securities such as shares, mutual funds, insurance and bonds to meet your financial needs.

You can opt for a loan against shares when you need instant financing to meet your personal or business needs.