ServicesLoan Against Shares


Loan Against Shares (LAS) is a facility provided by many financial institutions where investors can obtain a loan by pledging their shares as collateral. It's a form of secured loan where the lender retains the shares until the borrower repays the loan along with interest.

Benefits for Investors
  • Quick and easy access to funds : Since the shares act as collateral, the loan processing is generally faster than unsecured loans.
  • Retain ownership of shares : The investor continues to own the shares and can benefit from any price appreciation or dividends during the loan tenure.
  • Lower interest rates : Since LAS is a secured loan, the interest rates are generally lower than unsecured loans.
  • Diversify investments : Investors can use the funds obtained through LAS to diversify their investments or use for any other financial goals.
What to Take Care of
  • Loan to Value (LTV) ratio : The lender may offer up to a certain percentage of the value of shares as a loan, which is the LTV ratio. It's important to understand this ratio and not over-leverage.
  • Volatility risk : Since the shares are pledged as collateral, any sharp decline in their value could lead to a margin call from the lender, requiring additional collateral or repayment of the loan.
  • Interest rates and charges : It's important to compare the interest rates, processing fees, prepayment charges, and other terms and conditions before choosing a lender.


If the value of the shares falls below the LTV ratio, the lender may ask for additional collateral or repayment of the loan to cover the shortfall.
Generally, no. The shares are pledged as collateral and the lender has a lien over them until the loan is repaid.
The interest rate may be a fixed or floating rate and is generally calculated based on the LTV ratio, creditworthiness of the borrower, and prevailing market rates.
Yes, you can use the funds for any purpose, but it's important to consider the interest costs and the risk of over-leveraging.
In case of default, the lender can sell the pledged shares to recover the outstanding amount. Any surplus after repayment of the loan and charges is returned to the borrower.
Yes , you can pledge mutual fund units also.