Loan Against Shares – Unlock Liquidity Without Selling a Single Share
Need quick funds for short‑term expenses? A Loan Against Shares lets you access money instantly while keeping your investments intact. With Shriram Financial Services, you can get credit against your shares - currently available for Demat accounts with NSDL.
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Loan Against Shares: Borrow Funds without Selling Investments
Unlock the value of your share portfolio with a Loan Against Shares. Access funds by pledging your eligible shares while continuing to stay invested in the market. With Shriram Financial Services, enjoy a simple application process, competitive interest rates, and quick access to funds without disrupting your long-term investment goals.
Interest Rate
Max LTV
Disbursal
Approved Scrips
Foreclosure
From 12% p.a.
Up to 50%
12-24 hrs
800 +
Zero charges
How It Works in 3 Steps
Pledge Your Shares
You pledge approved shares from your Demat account
Get a Credit Limit
Lender assigns a credit limit based on LTV (up to 50% of share value)
Withdraw Funds
Withdraw funds as needed; pay interest only on amount used.
How the LAS Process Works?
With Shriram Financial Services, the Loan Against Shares journey is transparent and digital‑first. From valuation, Pledging to unpledging, every step is secure, regulated, and hassle‑free.
Valuation & Eligibility
Eligible shares are valued and LTV is determined.
Loan-to-Value (LTV)
Loan limit is set based on your shares' market value.
Lien Marking
OTP authorises lien on pledged shares via NSDL.
Repayment & Interest
Pay interest only on the amount you withdraw.
Unpledge
Repay the loan to remove the lien and regain shares.
What are the Features and Benefits of LAS?
A Loan Against Shares is more than just a credit facility - it’s a flexible way to unlock liquidity while keeping your portfolio intact. Here are the standout benefits you enjoy with Shriram Financial Services:
Pay Interest Only on Amount Used
Think of it like an overdraft. You’re billed daily only on the balance you actually withdraw, not on the full sanctioned limit. This keeps borrowing costs low and transparent.
Retain Ownership of Shares
Your shares remain yours. Even while pledged, you continue to all corporate benefits like earn dividends, bonuses, and benefit from stock splits etc. - so your portfolio keeps growing.
Flexible Withdrawal & Repayment
Draw funds whenever you need them and repay at your convenience. There are no rigid EMI schedules, you can choose your EMI date as per your convenience giving you complete control over cash flow.
Competitive LTV
Borrow up to 50% of your approved equity shares’ value, in line with RBI guidelines. This ensures both safety and maximised liquidity.
Digital Pledge Process
No paperwork, no branch visits. Authorise pledges instantly via NSDL.e‑pledge with OTP verification - a secure, digital‑first experience.
Share Swap Facility
Replace pledged shares with other approved securities anytime. This flexibility helps you optimise your portfolio without breaking the loan arrangement.
Eligible Securities & Approved Scrip List
RBI mandates that only exchange-listed, liquid, and independently-valued securities can be pledged. Below are the four main asset classes accepted, with their respective LTV ratios. Here’s a clear breakdown:
Security Type
LTV (Loan‑to‑Value)
Notes
BSE/NSE Listed Large Cap
Up to 50%
NIFTY 50, BSE 100 constituent stocks
Mid-Cap Equities
Up to 50 %
NIFTY Midcap 150 constituents (SEBI approved)
Exchange-Traded Funds (ETFs)
Up to 50%
NIFTY 50 ETF, Liquid BeES
Sovereign Gold Bonds (SGBs) and G-Sec
Up to 50%
RBI-issued SGBs held in demat form
What are the Interest Rates & Fees for LAS?
Understanding the applicable interest rates and charges is important before availing a Loan Against Shares (LAS). The overall cost of borrowing depends on factors such as the sanctioned limit, utilisation amount, loan tenure, and applicable fees & charges
A key advantage of LAS is that interest is generally charged only on the amount utilised, not the entire sanctioned limit, making it a flexible financing option.
Component
Details
Interest Rate
From 12% p.a. (interest charged only on the utilised amount)
Processing Fee
<1%> of sanctioned limit + applicable taxes
Account Maintenance Charges
₹ NIL per quarter / annum
Renewal Fee
₹NIL per annum
Penal Interest
<3% p.a.> on overdue or overdrawn amounts
Foreclosure Charges
Nil
Swap Charges
₹ 2000 per request
Loan-to-Value (LTV) Ratio Explained
The Loan-to-Value (LTV) ratio determines the maximum loan amount you can avail against the market value of your pledged shares.
The higher the value of your eligible securities, the higher the loan amount you may be able to access, subject to applicable regulatory guidelines.
What is the LTV Ratio?
The Loan-to-Value ratio measures the loan amount as a percentage of the market value of the pledged shares.
Formula: LTV = Loan Amount ÷ Market Value of Shares × 100
Example: ₹10L portfolio → maximum loan eligible = ₹5L .
Why LTV Matters?
The LTV ratio helps manage risk for both borrowers and lenders. If the value of pledged shares falls significantly, the LTV ratio may Increase beyond the permitted limit, which could trigger a margin call.
Tips to Maintain a Healthy LTV Ratio
Avoid borrowing the maximum available limit.
Maintain a safety buffer for market fluctuations.
Diversify your pledged portfolio across sectors and stocks.
Regularly monitor the value of pledged securities.
Respond promptly to any margin call notifications.
A lower LTV ratio provides greater flexibility and protection during market volatility. Maintaining a comfortable margin buffer can help you manage your Loan Against Shares more effectively and reduce the risk of margin calls.
Margin Call: What It Is & How to Handle It?
A margin call is a standard risk-management mechanism designed to protect both the borrower and the lender when market values decline. Since share prices fluctuate on real time basis, the value of your pledged collateral can decrease over time, and if it falls significantly to push your LTV below the permitted limit of 90%, the lender may issue a margin call asking you to restore the required margin within a set timeframe.
What Triggers a Margin Call?
A margin call may occur when:
- The market value of pledged shares declines substantially.
- The approved LTV ratio exceeds the permissible limit.
- Portfolio concentration or volatility increases the risk profile of the pledged securities.
How Can You Respond to a Margin Call?
There are several ways to restore the required margin and continue enjoying your credit facility:
Pledge Additional Eligible Shares
You can pledge additional approved securities to increase the collateral value and bring the LTV ratio back within the permitted range.
Make a Partial Loan Repayment
Reducing the outstanding loan amount can help restore the required margin and lower your LTV ratio.
Replace Existing Securities
Subject to lender approval, you may swap certain pledged securities with eligible shares that have a higher market value.
What Happens If You Do Not Respond?
If the margin shortfall is not addressed within the specified period, the lender may invoke the pledge and sell a portion of the pledged securities to recover the shortfall and restore the required margin levels. In the event of invocation of the pledged securities, such number of shares as are required to recover the total outstanding loan amount, as on the date of invocation, shall be sold. Upon realization and appropriation of the sale proceeds towards settlement of the lender's outstanding dues, the loan account shall stand closed, and any remaining pledged shares shall be released and returned to the customer after revocation of the pledge thereon.
How to Avoid Margin Calls?
While market fluctuations cannot be predicted, the following practices may help reduce the likelihood of a margin call:
Eligibility Criteria for a Loan Against Shares
Before applying for a Loan Against Shares, it is important to ensure that you meet the basic eligibility requirements. Eligibility for LAS is typically based on factors such as your residency status, age, Demat holdings, and the value of the securities being offered to be pledged.
Who Can Apply for a Loan Against Shares?
You may be eligible to apply if you meet the following criteria:
Indian resident individual - Salaried / Self-employed / Professional / Business owner
Age: 21–70 years
Active Demat account ( or NSDL)
Approved shares with a minimum portfolio value of ₹50,000, and atleast 3 scrips offered for pledge.
CIBIL score: 400+ preferred
Valid KYC: Aadhaar + PAN
Who May Not Be Eligible?
The following applicants may not qualify for a standard Loan Against Shares facility:
Minors or HUFs
NRIs
Directors/Promoters pledging shares of companies in which they hold such positions
Shares held in physical (non-Demat) form
Applicants who do not meet the minimum portfolio value requirements.
Documents Required
Applying for a Loan Against Shares is a simple and largely digital process. To ensure faster approval and seamless disbursal, applicants must ensure to have the below given document.
Document
Individual
Identity Proof
Aadhaar / PAN / Passport
Address Proof
Aadhaar / Utility Bill
Income Proof
Salary slips / ITR
Demat Statement
Last 3 months
Bank Statement
6 months
Photo
Passport size
Shriram Financial Services accepts eKYC via Aadhaar OTP - no branch visit required for individual borrowers.Shriram Financial Services accepts eKYC via Aadhaar OTP - no branch visit required for individual borrowers.
How to Apply for a Loan Against Shares
Apply for a Loan Against Shares in 5 Simple Steps. The entire process can typically be completed online with minimal documentation.
Apply Online
Submit your application with basic details.
Complete KYC
Upload documents or verify eKYc through Digilocker
Portfolio Assessment
Eligible shares are evaluated for loan approval.
Digital Pledge Authorisation
Confirm the pledge via NSDL OTP.
Loan Activation
Access your approved credit limit within 12- 24hours.
Loan Against Shares Vs Other Loan Types
When seeking funds, borrowers often compare multiple financing options. A Loan Against Shares offers a unique advantage by providing liquidity while allowing you to retain ownership of your investments.
Loan Against Shares Vs Personal Loan Vs Gold Loan Vs Loan Against Property
Feature
Loan Against Shares
Personal Loan
Gold Loan
Loan Against Property
Collateral Required
Shares & Securities
No
Gold
Property
Interest Rate
From 12% p.a.
<12>% – <17>% p.a.
<8>% – <12>% p.a.
<9>% – <14>% p.a.
Processing Time
12-24– Hours
1–7 Days
Same Day
7–15 Days
Continue Holding Asset
Yes
N/A
Yes
Yes
Loan Amount Depends On
Portfolio Value
Income Eligibility
Gold Value
Property Value
Margin Call Risk
Yes
No
No
No
Top Use Cases - When to Use Loan Against Shares
A Loan Against Shares can be an effective funding solution when you need liquidity but do not want to liquidate your investment portfolio. Check out the Top cases to use Loan against Shares.
Emergency Funding Needs
Access funds quickly for unforeseen expenses without disrupting long-term investment plans.
Business Working Capital
Bridge short-term cash flow gaps and manage business expenses more efficiently.
Home Purchase Payment
Arrange temporary liquidity while awaiting other funds or asset sales.
Avoid Selling During Market Corrections
Instead of selling shares at unfavourable market levels, investors may use LAS to meet immediate financial requirements.
Education & Medical Expenses
Manage large expenses without redeeming long-term investments.
Smart Strategies: When & How to Use LAS Optimally
5 Smart Use-Case Scenarios
- Emergency Fund Bridge - Cost: ~₹8,219 (LAS) vs breaking FD early or a personal loan (₹12,329). LAS wins.
- Business Working Capital - MSME OD model. Draw when needed, repay on receipt. Pay per day only.
- Home Down Payment Bridge - 30-day bridge. Repay on property sale proceeds.
- Market Opportunity Funding - CAUTION: Double market exposure risk. For sophisticated investors only.
5 Mistakes to Avoid with LAS
- Taking 100% of LTV limit - leaves no buffer for market falls
- Pledging only small-cap scrips - higher LTV reduction risk during volatility
- Ignoring margin calls - risk of forced liquidation at worst prices
- Using LAS for long-term consumption spending - interest compounds significantly
- Not monitoring portfolio weekly - caught off-guard by margin call triggers
Tax Implications of Loan Against Shares
Before availing a Loan Against Shares, it is important to understand the basic tax implications.
Pledging Shares Does Not Trigger Capital Gains Tax
Simply pledging shares as collateral does not constitute a sale and does not attract capital gains tax liability.
If Shares Are Sold Due to Pledge Invocation
If pledged securities are sold to recover dues, capital gains tax may apply depending on the holding period and applicable tax provisions.
Important Note - Tax treatment varies based on individual circumstances. Borrowers should consult a qualified tax advisor before making financial decisions.
RBI & SEBI Regulatory Framework for LAS
Loan Against Shares facilities operate within a regulated framework designed to protect investors and ensure transparency.
Key Regulations Borrowers Should Know
- RBI prescribes prudential norms for lending against listed securities.
- SEBI regulates the pledge mechanism through authorised depositories such as NSDL /CDSL
- Pledged securities remain in the borrower's Demat account.
- All pledge transactions must follow the approved electronic pledge process.
- Lenders must comply with prescribed Loan-to-Value (LTV) requirements.
Apply for a Loan Against Shares in Minutes
100% digital and paperless. Pledge your listed shares, stay invested, and get funds credited without selling your portfolio.
Got Questions?
View All FAQsA Loan Against Shares is a secured credit facility that allows you to borrow funds by pledging eligible shares and securities while continuing to retain ownership of your investments.
The loan amount depends on the market value of the pledged securities and the applicable Loan-to-Value (LTV) ratio. Typically, lenders may offer funding of up to 50% of the value of eligible shares, subject to prevailing regulations.
No. You continue to remain the owner of the pledged shares and may continue to receive corporate benefits such as dividends, bonus issues, and rights entitlements, subject to applicable terms.
Only shares approved by the lender and meeting regulatory eligibility criteria can be pledged. Eligible securities are generally selected based on liquidity, market capitalisation, and risk parameters.
Need A Clearer Direction?
Let's get in touch on a 15-minute call where we can answer any questions you may have. Our advisor will help you weigh a pledge against selling and show what a dedicated, research-led plan would do differently.