The sanction limit is the maximum loan amount you are eligible to avail under a single loan agreement after e-signing the Master Loan Agreement.
At Zerodha Capital it is calculated as 0.75 times the value of your pledged securities, or Rs. 1,00,000, whichever is higher. The maximum sanction limit for an individual client is capped at Rs. 10 crore.
If you take multiple top-up loans, your outstanding balance adjusts within your existing sanction limit. If a new loan request exceeds the current limit, an addendum to the original loan agreement must be signed.
Example
| Total pledge value (Rs.) | Sanction limit (Rs.) | Request | Limit breached |
|---|---|---|---|
| 5,00,000 | 3,75,000 | Initial loan of 2,25,000 | No. Initial limit set at 0.75x of Rs. 5 lakh. |
| 7,00,000 | 3,75,000 | 1st top-up of 90,000 | No. Total loan of Rs. 3.15 lakh is still within the initial limit. |
| 9,00,000 | 6,75,000 | 2nd top-up of 90,000 | Yes. The request exceeds the old limit, so a new limit of Rs. 6.75 lakh (0.75x of Rs. 9 lakh) is applied. |
Revision of the sanction limit
- Once your first sanction is availed and fully utilised, the sanction limit is revised.
- The limit can be revised a maximum of two times. Each revision costs an additional Rs. 500 in stamp duty.
- Revision also depends on your credit and risk profile, which Zerodha Capital assesses periodically.
Why you cannot increase it after 30 months
As per Zerodha Capital's internal policy, a new sanction limit cannot be created during the last 6 months of the 3-year loan tenure. After 30 months you cannot increase your sanction limit or borrow beyond it, though you can still avail a top-up loan within the existing limit.