There is a certain type of investor who has done everything right. Built a strong equity portfolio over years. Stayed invested through corrections. Never panicked. And then, one day, they need money for something — a business deal, a medical bill, a property payment — and the first thing they think of is: “Should I sell some shares?”
If you are that person, here is what I want to tell you before you hit the sell button. Stop. There is a better option.
A loan against stocks lets you access liquidity without selling your investments. You pledge your shares, get a loan against them, use the money for what you need, and your portfolio continues to work for you. When you are done, you repay the loan and your shares are released. Simple in concept, powerful in execution.
How Loan Against Stocks Works
With Bajaj Finance, you can get a loan against shares by pledging approved equity holdings from your demat account. The loan-to-value (LTV) offered is up to 50% of the market value of your pledged shares. So if you pledge shares worth Rs. 10 lakh, you can access up to Rs. 5 lakh.
Bajaj Finance maintains a list of over 1,000 approved shares. You can only pledge scrips from this approved list. The pledge is created digitally through the depository system — NSDL or CDSL — and is a fully secure process.
Loan amounts range from Rs. 10,000 to Rs. 1,000 crore for individuals. Corporates and other entities can also access this facility by reaching out directly to Bajaj Finance.
The Flexibility Factor
A loan against shares works like a revolving credit facility instead of a regular term loan. Based on the pledged share value, a drawing limit is available for withdrawals as required. The loan against stock interest rate applies only to the amount used and for the period of utilisation. Flexible repayment and tenure options between 7 days and 36 months make it suitable for short-term financial requirements.
Your Shares Still Work for You
This is what most people miss. When you pledge shares for a loan, you do not transfer ownership. The shares remain in your name. You continue to earn dividends. If the share price rises and increases your portfolio value, your drawing power increases automatically — you can withdraw more without pledging additional scrips.
You also retain the right to swap shares during the loan tenure, within Bajaj Finance’s approved list.
The Margin Call Reality
Here is the part you need to understand clearly, because it is where the risk lives. Since the LTV is based on market value and markets move, the value of your pledged shares can fall. When this happens, your drawing power reduces. If the shortfall becomes significant, Bajaj Finance will ask you to either pledge more shares or repay a portion of the outstanding loan to restore the required margin.
If you cannot do this within the stipulated time, Bajaj Finance has the right to liquidate a portion of your pledged shares. This is not something to be alarmed about if you are borrowing responsibly — but it is something to be aware of, especially if you are taking a large loan relative to your portfolio value or if you are in a volatile market period.
The Smart Way to Use This Product
The key to using a loan against stocks smartly for short-term needs is to borrow only what you genuinely need and have a clear repayment plan. Do not borrow to the full limit just because the limit is available. Keep a buffer.
If your short-term need is well-defined — say, you need Rs. 5 lakh for 3 months — then pledging shares worth Rs. 15 lakh gives you room. The interest cost for 3 months at prevailing rates will be a fraction of what you would lose by selling strong long-term holdings and re-entering later at higher prices.
The Bottom Line
Selling shares to meet short-term needs is almost always a suboptimal move for long-term investors. A loan against stocks from Bajaj Finance lets you have your portfolio and use it too. When used with discipline and a clear repayment plan, it is one of the most efficient tools available to equity investors seeking short-term liquidity.
