Building an investment portfolio takes time, patience, and discipline. Years of accumulating shares, mutual funds, bonds, and fixed deposits. And then life presents a situation where liquid cash is needed — urgently and without warning.
Liquidating investments is rarely a clean decision. Selling at the wrong time locks in losses. Exiting a long-term position loses compounding momentum. And re-entering the market often happens at a higher price. A loan against securities solves this problem — letting investors access funds by pledging their financial assets without selling them.
What Is a Loan Against Securities
A loan against securities is a collateral-backed credit facility where investors pledge eligible financial assets and receive a loan against their value. Bajaj Finance offers this for equity shares (1,000+ approved scrips), mutual funds (5,000+ schemes), fixed deposits, bonds, and life insurance policies.
The pledged assets are not sold. They remain in your name, continue to earn returns, and are released once the loan is repaid. The lender simply holds a lien for the duration of borrowing.
The Benefits Are Real and Significant
Cost: Interest rates on a loan against securities from Bajaj Finance start from 8% per annum — a fraction of personal loans (12–18%) or credit cards (30–40% annualised). The rate is low because the loan is fully secured.
Structure: LAS works as a revolving credit line. You get a drawing power and withdraw as needed. Interest is charged only on what you use, only for the days you use it. This makes it vastly more cost-efficient for irregular or short-term cash needs.
Flexibility: Bajaj Finance accepts a wide range of securities as collateral. Most investors with a diversified portfolio can find eligible assets.
Speed: The application and disbursement process is fully digital. Funds are typically available within one business day of successful pledging.
The LTV Framework
The Loan-to-Value ratio determines how much you can borrow. Bajaj Finance’s loan against securities interest rates and LTVs vary by asset: equity shares at up to 50% LTV, equity mutual funds up to 50%, debt mutual funds up to 90%, fixed deposits up to 75%, and bonds up to 95% for select categories.
A diversified portfolio with equity and debt can generate meaningful borrowing capacity. You can check current rates on the Bajaj Finance website under the loan against securities rate of interest section.
What Investors Often Overlook
Many investors use a loan against securities not just for emergencies but strategically — when a business opportunity or time-sensitive investment arises. You deploy borrowed capital, earn returns, and repay the loan while your pledged portfolio continues to compound. This requires careful analysis of expected returns versus borrowing cost, but for disciplined investors, it represents a genuine advantage.
The Margin Call — Understanding the Risk
If the value of your pledged securities falls and the LTV breaches the permissible limit, Bajaj Finance will ask you to pledge additional securities or partially repay the loan. If not addressed within the stipulated timeline, a portion of your pledged assets may be liquidated. This is standard risk management — not punitive — but awareness is essential.
Borrowing conservatively, well within your drawing power, keeps this risk manageable. For investors who have spent years building a portfolio, a loan against securities is the most sensible way to access liquidity without undermining that effort.
