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.