Eligibility criteria and documents required
Anyone can apply for our loan against shares online, as long as they meet the four basic criteria mentioned below. Also keep a few documents handy while applying for Loan against shares.
Eligibility criteria
- Nationality: Indian
- Age: 18 to 90 years
- Employment: Salaried, self-employed
- Security value: Minimum Rs. 50,000
Documents
- KYC documents:
a. Passport
b. Driving License
c. Voter’s Identity Card
d. Aadhaar
e. Job Card issued by NREGA
f. Letter issued by the National Population Register - PAN card
- DEMAT holding statement
Corporates/ HUF/ LLP/ Partnership/ Trust/ Sole Proprietorship can apply for loan against shares of up to Rs. 1000 crore, by reaching us at las.support@bajajfinserv.in.
How to apply for a loan against shares
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Frequently asked questions
The eligibility criteria for loan against shares with Bajaj Finance are:
- You must be an Indian citizen.
- Your age should be between 18 to 90 years.
- You must either be Salaried, or self-employed.
- You must have a minimum security worth Rs. 50,000.
Through the loan against shares by Bajaj Finance, you can get a pre assigned loan of Rs. 10,000 to Rs. 1000 crore.
A loan against shares offers several benefits, including liquidity without selling assets, enabling investors to meet immediate financial needs. Interest rates are often lower compared to unsecured loans, making it a cost-effective solution. Additionally, borrowers retain ownership of the shares, participating in potential market gains.
The RBI guidelines for availing loans against securities include:
- Approved securities: Only approved shares and eligible securities can be pledged, as per lender’s list.
- Loan-to-Value (LTV) ratio: Maximum LTV is capped at 50% of the value of pledged shares.
- Mode of disbursement: The loan amount must be credited directly to the borrower’s bank account; it cannot be used for further margin trading.
- Demat requirement: Shares must be held in demat form and pledged via depository systems like NSDL or CDSL.
- End use restrictions: Funds cannot be used for investment in capital markets (such as buying more shares).
The act of taking a loan against shares is not taxable because it is a debt and not an income. However, if the borrowed funds are invested and generate income, that income (e.g., interest, dividends) may be taxable according to the relevant income tax laws. Additionally, if shares are sold to repay the loan, any capital gains from the sale of shares will be subject to capital gains tax based on the holding period and applicable rates. It is important to consult with a tax professional to understand specific liabilities based on how the loan funds are used.
A lender can provide a loan against equity shares on only those stocks that are included in the lender's official list. Bajaj has a list of 1000+ shares to choose from.
Interest rates typically range from 8% to 15% p.a., and the repayment tenure can go up to 7 days to 36 months, depending on the lender’s terms.
No, a DEMAT account is mandatory as shares need to be pledged electronically through authorized depositories like NSDL or CDSL.
If share prices fall, you may be asked to provide additional collateral or repay part of the loan to maintain the loan-to-value ratio.
Once documentation and share pledge are complete, loan disbursal typically happens within 24 or in some cases on the same day of approval.
