Loan Against Shares

A loan against shares (LAS) is a secured loan that you can take out by pledging your shares as collateral. This means that the lender will hold your shares until you repay the loan, and if you default on the loan, they can sell your shares to recoup their losses.

Loan Against Shares can be a good option if you need to borrow money quickly and you don't want to sell your shares. However, it's important to be aware of the risks involved before you take out an LAS.

Why Take a Loan Against Shares?

There are several reasons why someone might choose to take a loan against shares (LAS) instead of other borrowing options. Here are some reasons why you should consider taking a loan against shares:

  • Quick access to cash: Get funds fast for urgent needs like medical bills or emergencies.
  • Keep your investment: Borrow without selling shares, potentially benefiting from future price growth.
  • Limited downside risk: Unlike full loss with default on unsecured loans, only pledged shares are sold to cover the outstanding balance.
  • Flexible usage: Use funds for various purposes like business expansion, education, debt consolidation, or personal investments.
  • Potential tax benefits: Interest payments may be tax-deductible in some countries.

Interest Rates for Loan Against Shares

A loan against shares (LAS) gives access to quick funds while retaining ownership of your stocks. Understanding how interest rates influence LAS is key to making informed decisions. Weighing the cost of borrowing, risk factors, and market trends against your individual needs is crucial before availing.

Here are the highlights of Loan Aginst Shares:

Loan amount Up to ₹20 lakhs
Loan Value Up to 50% market value of shares
Interest Rate Starting from 9.50% p.a.
Repayment Tenure 6 months to 36 months

Top Banks Providing Loan Against Shares

​​Here is a list of top banks offering LAS. Compare the interest rates and choose the best lender as per your financial requirements:

Top Banks Interest Rate Loan Amount
Axis Bank 10.50% to 12.75% p.a. 10.50% to 12.75% p.a.
Bajaj Finserv 9.50% to 12.00% p.a. Up to Rs.10 crore
HDFC Bank As per the bank's discretion Starting Rs.50,000
ICICI Bank Based on loan amount and tenure Rs.50,000 to Rs.20 lakh
State Bank of India (SBI) Depends on the selected scheme Rs.20,000 to Rs.5 crore
Note: The interest rates are subject to change as per lender’s discretion.

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Eligibility Criteria For Loan Against Shares

Loan against shares (LAS) offers a unique way to access quick funds while holding onto your investments. Here are the key eligibility criteria for availing a loan against shares:

Eligibility of Borrower:

  • The loan is available for individuals above 18 years of age.
  • The applicant must have a demat account.
  • Traders, industrialists, and businessmen are eligible for LAS.

Eligibility of Collateral:

  • The shares to be pledged as collateral should be held in dematerialized or demat form.
  • Most banks provide loans up to 50% of the market price of the pledged shares on the date of availing the loan.
  • If the market value of collateral shares falls close to the outstanding loan value, banks may request additional shares to be pledged or sell existing shares to close the loan.

Documents Required For Availing Loan Against Shares

LAS can be availed easily as shares serve as the underlying collateral. Only a few documents need to be submitted to avail this loan. Here are the key documents required for availing a loan against shares:

  • Duly filled loan application form with photograph.
  • Self-attested copies of Income Tax Returns for the last 2 years.
  • Self-attested copies of bank account statements for the last 3 months.
  • Client master list for the demat account which holds the shares to be pledged (for digitized securities).

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Features & Benefits of Loan Against Shares

Taking a loan against shares is a better alternative than selling your shares at a low price. As loans against shares are secured, they offer the following key features and benefits:


  • Collateral-backed: Pledge your existing shares as security, reducing the lender's risk and potentially securing lower interest rates compared to unsecured loans.
  • Quick access to funds: Enjoy swift loan disbursal, often within days, making LAS ideal for urgent financial needs.
  • Flexible repayment: Choose from diverse repayment structures, including overdrafts, demand loans, or EMIs, to tailor the loan to your cash flow.
  • Multiple uses: Utilize the borrowed funds for a wide range of purposes, from business expansion and education to debt consolidation and personal investments.


  • Retain investment potential: Unlike selling shares, LAS lets you hold onto your investments, allowing you to benefit from future price appreciation.
  • Lower risk of complete asset loss: Compared to unsecured loans, where defaulting results in full asset loss, LAS only involves potentially selling pledged shares to cover the outstanding balance.
  • Improved credit score: Timely repayments on an LAS can positively impact your credit score, enhancing your future borrowing potential.

How To Apply For Loan Against Shares

You can apply for a loan against shares online by pledging shares via their demat account, digitally signing the agreement, and get the loan amount credited to their account - all through a seamless digital journey.

Here’s how you can apply for a loan against shares in just a few steps online:

Step 1: Login to Net Banking and select the shares to pledge as collateral

Step 2: Digitally accept the loan agreement by entering the OTP sent to your registered mobile number

Step 3: Pledge the selected shares via depositories NSDL/CDSL

Step 4: On successful pledge of shares, the approved loan amount gets credited into the linked overdraft account

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You can also check other secured loan options from below:

Loan Against Mutual Funds Loan Against Securities
Loan Against FD Loan Against Car
Loan Against LIC Policy Loan on Credit Card
Loan Against Gold Loan Against Bonds
Loan against SGB Loan Against EPF
Loan against PPF Loan Against Agricultural Land
Loan Against Property Loan Against Insurance Policy

Frequently Asked Questions

LAS is a loan you can take out by pledging your shares as collateral. The lender holds your shares until you repay the loan, and if you default, they can sell your shares to recoup their losses.

The loan amount depends on the value of your shares, with typical maximums around 50% of the value. Lenders also have minimum value requirements for pledged shares.

Yes, you can continue to receive dividends and other income from your pledged shares while they are held as collateral.

Interest rates can vary depending on the lender, loan amount, and market conditions, usually starting from 9.50% p.a.

Tenure options can vary, but typical lengths range from a 6 months to 36 months. Some lenders offer overdraft facilities with flexible repayment.

Lenders have approved lists of eligible securities, typically including blue-chip stocks and certain mutual funds. Check with your chosen lender for specific details.

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