Accessing instant liquidity still remains one of the top dilemmas amongst investors. How to get quick liquidity without having to sell your years of investments is something that many people struggle to figure out. The answer to this one question lies in pledging shares for a loan against securities. The digitalisation of the investment landscape has enabled this smooth process for people to access funds quickly in times of need.

It might sound a bit complicated at first glance, but it is quite simple. A loan against securities allows you to borrow money against your investment portfolio or by using your portfolio as collateral. Just like you put up your house, gold or car as collateral to get a personal or educational loan, you can secure a loan by putting up your investment portfolio as collateral. This way, you won’t have to liquidate your shares, mutual fund investments or ETFs. You just have to pledge these securities to a lender and typically get a loan that’s 50%-70% of the market value of the securities.
How To Get A Loan Against Securities?
Getting a loan against securities by pledging shares used to be a very tedious, cumbersome and paperwork-heavy process. However, when the number of trading apps skyrocketed, the process got a lot simpler. Using a trading app of your choice, you can easily initiate a pledge request and track its status in real time.
There are also many trading apps that integrate the features of stock recommendations and portfolio insights. These tools enable you to decide which holdings or securities are better suited for pledging.
Here are some simple steps that you can follow to pledge shares online:
- Check Eligibility: The very first step you take in order to pledge shares online is to check the eligibility of your securities. This is because not all securities are eligible to be used as collateral for a loan. Use your trading platform to figure out which securities qualify for pledging.
- Choose The Correct Lender Or App: Use the best trading app to ensure that you get the best interest rates, loan-to-value ratio and repayment flexibility.
- Initiate The Pledge Request: Once you have selected the best offer, you can now log in to your demat account using your investment app and proceed with the process.
- Verification: Confirm your pledge request once you have applied for it through an OTP or email authentication.
- Loan Disbursement: Once your request has been verified, the loan amount will be credited to your linked bank account as an overdraft facility.
Pledging shares is an effective method to unlock capital without violating your long-term wealth creation plans. Digital finance has made the process of doing so simpler than ever before, be it a trading application or an investing app. Pledging shares can be a safe, smart, and stress-free process by selecting the most appropriate trading application, keeping track of your portfolio and staying informed with timely recommendations on which stocks to buy.