What is Loan Against Securities?

You have invested in securities like stocks, shares, and mutual funds. But, even with a secured future, do you fear about the other unexpected expenses like your child's education or any medical emergency? In that time, you can get the loan by pledging your security. At My Mudra, we help you get a loan against securities in India instantly.

Loan Against Securities: Meaning

Loan Against Securities meaning is pretty simple. It refers to getting a loan by pledging your securities, such as shares, stocks, mutual funds, and other listed securities. Even though the bank/financial institution holds the securities as collateral, the securities remain in your name. You continue to earn dividends, interest, or returns.

The loan amount differs from one security to another and varies as per market conditions. For instance, in Equity shares, you may get a 50% loan, and for Life Insurance Policies, you may get an 80% loan.

How does it work?

Now that you have understood what is loan against securities is, let’s comprehend how it works. Suppose you invested in mutual funds over 2 years, and you have INR 5,00,000 worth of money. But, due to some uncertain circumstances, you need the cash in hand, and you're not ready to sell it. So, you decide to get a loan against the security you hold.

• Evaluation: As you have decided to get a loan with your securities. When you choose the bank, they will check the market value and compare it with your security.
• Decision making: Once the security falls under the eligibility criteria, the lender will calculate a Loan-to-Value ratio for the loan amount to manage the risk, as the market rate may fluctuate.
• Loan Sanction: After the document verification, as per the accepted terms and conditions, the amount will be credited into your bank account.
• Loan Repayment: Finally, you need to repay the borrowed amount within the agreed period. Once you repay the amount, you get your security.

Benefits of Loan Against Securities

When you are in need of money, your invested amount can support you in such situations. Most of the people in India feel that loans against securities are a good option, and here are the reasons:

• Pay for what you spend: In secured or unsecured loans, you need to pay the interest amount every month. But here you get the merit of paying the interest on the amount you spend.
• Lower interest rate: Compared to other loans or credit cards, the interest rates are comparatively low.
• Earn the returns: Even though your security is with the bank, you still get the returns. So you get the chance of earning even after the pledge.
• Quick liquidity option: A loan against securities allows you to easily convert your securities into cash and can be used for various needs.
• You hold the ownership: You retain ownership of the securities while they are pledged. (However, in case of default, the lender has the right to sell them to recover the loan amount).

Eligibility for Loan Against Securities

The eligibility criteria differ from banks to NBFCs, but generally, you need to check whether you qualify under the listed criteria.

• Citizenship: Must be an Indian resident, and can be an NRI
• Age: 21 - 65 years
• Employment: Self-employed or Salaried person
• Approved Securities: Listed shares, bonds, debentures, government securities, insurance policies, equity, and debt mutual funds
• Proof: Identify proof like Aadhaar Card, PAN Card, and Address proof like an electricity bill
• Passport-sized photos
• Demat account

Note: Only the listed or approved securities are considered for a loan.

Step-by-Step Application Process for Loan Against Securities Online

Here's a step-by-step application process for an instant loan against securities online through My Mudra:

• Open My Mudra homepage and click the Loan Against Securities option.
• With the help of the Loan against securities EMI calculator, you can check the loan amount, interest rate, and tenure months.
• Before filling out the application, check whether you qualify or not.
• After the check, fill out the application form available on the website with your details.
• Now, upload the mentioned documents, like security proof and bank statement.
• Upon uploading the documents, choose the securities you wish to pledge.
• Once your application gets approved after the verification process, the loan amount will be credited to your bank account.

Tip: Use the My Mudra Loan against EMI calculator for your requirements.

Choose My Mudra for Your Loan Against Securities

My Mudra aims to make the process of loan against securities simpler, faster, and reliable. Here are the reasons you need to choose us:

• Instant loan: As we are tied up with 90+ banks, we help you get instant loan approvals.
• Transparent process: The terms and conditions will be clarified before the service. We won't charge you unnecessarily.
• Safe and Secure: Your privacy is our top priority. We safely carry out the process, and your information is protected securely.
• Support and guidance: Our experts help you to find the best lender, and without any hesitation, you can reach out to us at any time.
• Attractive Interest Rates: The interest rate is often lower than credit cards and unsecured loans. Which means you can enjoy competitive interest rates for loans against securities.

Unlock the service which is faster, safer, and reliable. Apply now at My Mudra.

Also Read:
- Is Taking a Loan Against Shares Really Worth It?
- Loan Against Shares Interest Rates in 2025