Purpose for Loan Against Shares: Everything You Need to Know

Know about the purpose of getting a loan against shares and how it can help in your financial needs.
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3 mins read
26-March-2025

Need funds but don’t want to sell your stocks? A Loan Against Shares (LAS) lets you borrow by pledging your stocks as collateral while still owning them. Whether it’s for urgent expenses, business growth, or seizing new opportunities, LAS gives you quick liquidity with flexible repayment options. Why sell your investments when you can leverage them instead?

Get instant funds without disrupting your investment portfolio! Apply now

How loan against shares can support your financial needs?

Navigating financial solutions to meet urgent needs while maintaining your investment strategy can be challenging. One viable option is securing a loan against shares. This approach offers several advantages:

  • Quick access to funds: Leverage your market investments without liquidation.
  • Financial flexibility: Utilise the value of your shares for immediate liquidity.
  • Retain investment benefits: Continue to earn dividends and potential appreciation.
  • Competitive interest rates: Benefit from lower rates due to the collateral nature of the loan.

For a detailed guide on how to unlock the value of your investments with a loan against shares, read on to understand the process and benefits.

Avail of instant funds with a loan against shares

A loan against shares is a secured loan where borrowers use their shareholdings as collateral to obtain financing. This type of loan is particularly attractive for those who need immediate access to funds but do not want to sell their investments. The process typically involves pledging your shares to the lender, who will then grant a loan amount based on a percentage of the shares’ market value. This solution not only provides quick liquidity but also allows you to retain ownership of your investments, thus benefiting from any potential capital gains or dividends.

Benefits of loan against shares

  • Speed: Quick processing and disbursement of funds.
  • Lower costs: Lower interest rates compared to unsecured loans.
  • No asset liquidation: Access funds without selling your investments.

Top purposes for taking a loan against shares

Whether you need funds for personal use or business expansion, a loan against shares can be tailored to suit various purposes:

  • Emergency expenses: Handle sudden medical bills or unplanned events without financial strain.
  • Business investment: Inject capital into your business for growth or operational needs.
  • Education: Fund education for yourself or your family with flexible repayment terms.
  • Debt consolidation: Consolidate high-interest debts into a single, lower-interest loan.
  • Home renovation and other financial needs: Upgrade your home or cover other essential expenses without liquidating investments.

This flexibility makes it an appealing option for many, as it allows borrowers to meet their financial needs without compromising their investment portfolio.

How to avail loan against shares online?

  1. Eligibility check: Visit the lender's website to check if your shares qualify as collateral.
  2. Document preparation: Ready your identity proof, share certificates, and financial statements.
  3. Online application: Complete the application form on the lender's website and upload the necessary documents.
  4. Share valuation: The lender will assess the value of your shares to determine the loan amount.
  5. Approval and disbursal: Upon approval, the loan amount will typically be transferred to your account swiftly.

Availing a loan against shares online is a seamless process that lets you unlock funds without liquidating your investments. With quick approvals and minimal paperwork, you can access liquidity while still benefiting from market growth. Whether it's for business, emergencies, or personal goals, leveraging your shares ensures financial flexibility without disrupting your portfolio.

Access funds up to 50% of your portfolio's value without selling your shares! Apply now

Conclusion

Opting for a loan against shares provides a strategic solution for accessing funds quickly without selling your investments. It offers the benefits of lower interest rates, immediate liquidity, and the ability to meet various financial needs. By availing this loan online, you can efficiently manage the borrowing process from the comfort of your home. Remember to review the terms carefully and ensure your financial plans align with the repayment schedule to maximize the benefits of this financial tool.

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Frequently asked questions

Is it better to sell stock or borrow against it?
Deciding whether to sell stock or borrow against it depends on your financial situation and market conditions. Selling stock results in immediate cash but also potential capital gains taxes and loss of future appreciation. Borrowing against stock keeps your investment intact, allowing continued growth and dividends, but incurs interest and potential risks if the market declines. If you anticipate your stocks will appreciate or yield significant dividends, borrowing might be more advantageous.
How to get a loan on shares?
To get a loan on shares, you must own shares that qualify as collateral with a lender. Start by checking with financial institutions that offer securities-based lending to see if your shares qualify. You will need to provide documentation such as identity proof, share certificates, and financial statements. The lender will evaluate the market value of your shares to determine the loan amount you can receive based on their loan-to-value ratio.
How much interest is a margin loan?
Interest rates on margin loans can vary widely depending on the brokerage, the amount borrowed, and market conditions. Typically, rates range from 5% to 9%. These loans are secured by your securities, and the rate may be lower compared to unsecured loans due to the lower risk involved for the lender.
For which purpose we can use a loan against shares?
A loan against shares can be used for various purposes, including personal expenses, funding large purchases, educational fees, medical bills, or business expansion. It offers the flexibility to meet urgent cash needs without liquidating your investments, allowing your portfolio to continue growing.
How much loan amount can I get against my shares?

The loan amount is determined by the market value of your pledged shares and the lender’s margin requirements, usually allowing you to borrow up to 50% of your portfolio’s value.

Pledge from 1,100+ approved shares and get a loan instantly! Apply now

Can I use a loan against shares for business purposes?

Yes, you can use the loan for business expansion, working capital, or any financial need, making it a flexible funding option without selling your investments.

Do I need to sell my shares to get a loan against them?

No, your shares remain in your ownership. They are only pledged as collateral, allowing you to access funds while continuing to benefit from dividends and appreciation.

What happens to my pledged shares after I repay the loan?

Once you fully repay the loan, your pledged shares are released back to you, restoring your complete ownership and control over your investment portfolio.

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