Top Benefits of Taking a Loan Against Stocks

When faced with an urgent financial requirement, selling your long-term stock investments is not always the best decision. A smarter alternative could be a loan against stocks. It lets you unlock the value of your investments without giving them up. 

Let’s walk through how it works and why more people in India in 2025 are choosing loan against securities as an option.

What is a Loan Against Stocks?

A loan against stocks, sometimes called a loan against shares, is a secured loan where your listed shares are pledged as collateral. You stay as the legal owner of those shares, but can borrow money based on their value. Most lenders offer around 50% to 70% of the market value, depending on the stock type and their risk appetite.

The best part is, you don’t need to sell your investments to get access to cash. It’s an easy and smart way to raise funds for personal or business needs.

How Does a Loan Against Stocks Work?

Here’s a brief overview of the process:

• You pledge your shares from a recognised depository (like NSDL or CDSL).
• The lender evaluates your portfolio and offers a loan based on its value.
• A lien is created on your demat account. It means you can’t sell the pledged shares until the loan is repaid.
• Interest is charged only on the amount utilised, not the entire sanctioned limit (in case of overdraft facility).

With My Mudra, the process is completely digital, fast and transparent. You can access loan against stocks India offerings from trusted banks and NBFCs in just a few clicks.

Why Consider a Loan Against Stocks in India?

The financial landscape in India in 2025 has shifted towards smarter credit solutions. Here’s why more investors are choosing loan against shares over traditional credit options.

1. Keep Your Stocks, Get the Funds

This loan lets you hold on to your shares, so if they go up in value, you still benefit. Plus, you keep receiving dividends or bonuses while using them to secure a loan.

2. Lower Interest Rates

Because it’s a secured loan, the interest rate is lower than what you’d pay on a personal loan. If you’re looking for a way to meet expenses without draining your finances, this is a much better deal.

3. Fast, Less Stress

Applying for a loan against shares is far more straightforward than most people expect. Thanks to digital lending platforms like My Mudra, you can apply, upload your documents, and receive funds in as little as 24 to 48 hours. 

4. Minimal Documentation

All you need is a demat account, KYC documents, income proof (in some cases), and a stable portfolio of approved shares. It’s far simpler than other secured loans.

5. Flexible Repayment Tenure

Most loan against shares come with flexible tenure options. It ranges from 12 months to 36 months. You can choose a term that matches your financial comfort.

Also, if you opt for an overdraft facility, you only pay interest on the amount you actually use, not on the full sanctioned loan. This can save you a lot in the long run.

Things to Keep in Mind Before You Apply

While a loan against stocks India has numerous benefits, here are a few things to be cautious about:

• Volatility risk: If stock prices fall, you might face a margin call. It means you’ll need to either add more security or repay part of the loan.
• Eligible shares list: Not all shares are accepted. Lenders have a predefined list of approved stocks based on liquidity and volatility.
• Loan-to-value ratio: This is dynamic and changes with market value. So keep track of your portfolio even after the loan is sanctioned.

Always use a loan calculator and understand the terms before pledging your shares.

Why Choose My Mudra?

My Mudra makes it simple to access loan against shares from multiple banks and NBFCs with one seamless platform. Here’s why we’re the preferred choice:

• Fast processing with online documentation
• Transparent interest rates and charges
• Tie-ups with over 90+ lenders across India
• Instant approval and disbursal in select cases
• Expert support from start to finish

If you have a solid portfolio and need funds without letting go of your investments, this might be the perfect solution.

Summing Up

A loan against stocks is a simple and effective way to raise funds while keeping your long-term investments intact. It provides you flexibility to borrow, the ability to pay back at your own time and you can continue enjoying the value of your stock holdings.

Make your investments do more for you. To unlock the value of your shares, apply for a loan against securities with My Mudra. It is quick, secure and 100% online.

Also Read:
- What is Loan Against Mutual Funds? Know How It Works
- Where to Buy Direct Mutual Funds