Asset Based Loan Options for Individuals Seeking Funds

When most people think of getting a loan, they think of their income. Salary slips, bank statements, ITR — proof that you earn enough to repay. This is the traditional model of lending and it works well for those with steady, documented incomes.

But there is another model that is equally valid and often more accessible: asset-based lending. Here, the loan is not based on what you earn — it is based on what you own. If you have financial assets, you may be eligible for a loan without needing to prove your income at all.

What Is an Asset Based Loan

An asset based loan is a credit facility where your borrowing capacity is determined by the value of your assets rather than your income. The assets serve as collateral. The lender holds a lien on them while the loan is outstanding and releases it upon repayment.

Bajaj Finance offers several forms of asset-based lending under its Loan Against Securities umbrella.

Types of Asset Based Loans Available

Loan Against Shares: Pledge equity shares from Bajaj Finance’s approved list of 1,000+ scrips. Borrow up to 50% of market value. Shares stay in your demat account, earning dividends and appreciating — just cannot be sold while pledged.

Loan Against Mutual Funds: Pledge mutual fund units from 5,000+ eligible schemes. Equity funds give up to 50% LTV, debt funds up to 90%. SIPs continue, portfolio keeps growing.

Loan Against Fixed Deposit: Pledge your Bajaj Finance FD and borrow up to 75% of the deposit value (cumulative). The FD keeps earning interest, and the loan costs just 2% above your FD rate — the cheapest form of asset-based borrowing available.

Loan Against Insurance Policy: Pledge eligible life insurance policies — ULIPs, endowment plans — and borrow up to 90% of the surrender value. Coverage continues uninterrupted.

Loan Against Bonds: For investors holding bonds and debentures, Bajaj Finance offers loans with LTV up to 95% for select categories.

Why Asset Based Lending Works for Individuals

The fundamental appeal is accessibility. Because the loan is secured, income proof is typically not required. Approval is based on collateral value and KYC compliance — not salary documents.

This makes asset based loans particularly useful for retired investors living off their portfolio, business owners with fluctuating income, freelancers, or HNIs with significant investments but no formal employment.

It is also significantly cheaper than unsecured borrowing. Personal loans cost 12–18% per annum. Credit cards can cost 30–40% annualised. Asset based loans from Bajaj Finance start from 8% per annum — with interest charged only on what you actually use.

The Credit Line Advantage

Most asset-based loans from Bajaj Finance are structured as revolving credit lines, not term loans. You receive a drawing power based on your pledged assets and withdraw from it as needed. You pay interest only on the utilised amount, only for the period it is outstanding.

This gives you standby liquidity — you do not pay for money you do not use. It is the equivalent of a financial buffer that costs nothing until you actually need it.

How to Get Started

The application process is largely digital. You apply online on the Bajaj Finance website, complete KYC, select assets to pledge, and follow the guided process to mark the lien or assignment. Funds are typically disbursed within one business day of successful verification.

One Important Note on Risk

The key risk with asset-based loans is the margin call — when falling asset values cause the LTV to breach the permitted threshold. When this happens, you must either pledge more assets or partially repay the loan. Borrowing conservatively, well within your drawing power, is the simplest way to manage this risk. For individuals who have spent years building their financial assets, an asset based loan is the most logical and affordable way to access liquidity when life demands it.