What is Loan Against Securities?


  • Borrow funds using your investment securities at a lower interest rate from bank & NBFC
  • Read the post and know about the loan against securities in detail

You can meet your financial expectation using your investments which help you borrow the desired amount at an attractive rate of interest. The mutual fund units, shares, bonds can be used to provide security for the loan amount. Investors can get 50%-90% of the investment value as the loan against security. Read the post and know about the loan against securities in detail.

Top Lenders That Offer a Loan Against Securities

The table below shows the list of top lenders and the interest rate they charge on sanctioning a loan against securities.

Banks/NBFCsInterest Rate (In Per Annum)
HDFC Bank8.70%-12.35%
Tata Capital10.50% onwards
Fullerton India11.00%-18.00%
Axis Bank10.50%-12.75%
Kotak Mahindra Bank9.25%-13.00%

Loan Amount

You can borrow the highest loan using your security value with the lowest rate of interest. The maximum amount one can borrow using a loan against securities is INR 5 Crore. And the payment of the borrowed loan can be made whether in equated monthly installments or a lump sum. As the loan has an overdraft facility so the interest rate is charged to the utilized amount only which makes it easy for you to access money whenever you need and pay them within the tenure.


The borrower has 12 months from the date of disbursal to pay the utilized loan amount with the applicable interest rate. During this period, the compound interest rate is charged on your balance, so it will be better if you take the help of an EMI tool to plan the repayment schedule.

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Loan Against Shares

The price of your market shares can lend you up to 50% of their value. The money which you have invested in the shares can get you a loan. People invest in shares as it is a popular source of easy money in short or long term investment.

Loan Against Mutual Funds

The Mutual Fund units can be used for your business or personal requirements. And the loan can be availed from any bank or NBFCs by pledging your mutual fund units. Your loan could range up to the market value of mutual funds of up to 60%. The limit may vary based on the type of mutual fund you invest in, because if you invested in equity then the loan would be 50% of its market value. Whereas the loan amount can account for upto 80% of the market value of debt funds. So, you can use your investments to borrow funds from the bank or NBFC if you need funds urgently.

Loan Against PPF

On your PPF, you can borrow a loan to meet your urgent financial needs. And they usually come up with low-interest rates. You can apply for a loan on the PPF account and it can only be taken between 3rd to 6 th financial year of opening the PPF account. The tenure of a PPF loan is 3 years which is higher than the other securities and offers you more time to pay the borrowed amount.

Loan Against NSC

The user can borrow against National Savings Certificates (NSCs) which provide benefits like high interest and tax benefits. You can borrow up to 70% of NSC value and some banks like Bank of Baroda put a margin over your loan that depends on the NSC maturity amount. The margin money could range from 15%-20% of the NSC value.

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Loan Against Insurance

The surrender value of your insurance policy can be used to borrow a loan. The policy needs to be assigned in favour of the insurer. And besides having the savings feature, the policies provide a life cover that makes your loan secured. You can borrow 85%-90% of your insurance policy from a bank or NBFC. To get a loan against the insurance policy, you should acquire a surrender value on the policy.

Loan Against Bonds

Loans can also be taken against your investments made in bonds. And the loan amount could be 50% to 60% of your bond’s current value at the time of loan application.


  • PAN card
  • Identity and address proof such as Passport, Electricity BILL, Telephone BILL, etc.
  • 2 Photographs
  • Last 6 months bank statement
  • Cancelled cheque
  • Account statement
  • Income proof like salary slip or salary certificate
  • Self Employed borrowers are required to submit the following income details –
    • Balance sheet
    • profit and loss account
    • Office address proof and business proof

How To Apply for Loan Against Security

You need to provide securities to a bank against which it offers you a loan. The loan amount is the percentage of your security market value, which depends on the market rates. Once you identify the securities you want to pledge, you should apply to the bank. The bank can evaluate your eligibility and approve your loan based on the security value in the market. And, after the loan approval, a current account is opened with an overdraft facility. The borrowing limit of your account is based on collateral like equity shares, debenture, bonds, mutual funds, etc.

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Personal Loan Interest Rates February 2024
HDFC Bank10.75% - 14.50%
ICICI Bank10.75% - 19.00%
IndusInd Bank10.25% - 26.00%
Kotak Bank10.99%
RBL14.00% - 23.00%
SMFG India Credit12.00% - 24.00%
Standard Chartered Bank11.49%
Tata Capital10.50% - 24.00%
Home Loan Interest Rates February 2024
Axis Bank8.75% - 9.15%
Bank of Baroda8.50% - 10.60%
Citibank8.75% - 9.15%
HDFC8.50% - 9.40%
ICICI Bank9.00% - 9.85%
Indiabulls Housing Finance Limited8.65%
Kotak Bank8.70%
LIC Housing8.50% - 10.50%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance8.50% - 10.95%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI9.10% - 9.65%
Tata Capital8.95% - 12.00%