Investor using LAS facility without selling stock portfolio

Loan Against Shares in India: Unlock Liquidity Without Selling Your Stocks

Unlocking Wealth with Loan Against Shares: A Smart Financial Move

Imagine having a portfolio of valuable shares but needing quick cash for a dream home, a business venture, or an unexpected expense. What if you could access funds without selling your investments? That’s where a Loan Against Shares (LAS) comes in—a powerful financial tool that lets you leverage your stock market holdings to meet immediate needs while keeping your investments intact.

At Anupam Wealth, we believe in empowering you with smart financial strategies, and understanding LAS is a step toward unlocking the full potential of your wealth. Let’s dive into what a Loan Against Shares is, how it works, and the pros and cons to help you decide if it is the right move for your financial journey.

What is a Loan Against Shares?

A Loan Against Shares is a type of secured loan where you pledge your shares—stocks or equity holdings in publicly listed companies—as collateral to borrow money from a bank or financial institution. Think of it like a home loan, where your property is the collateral; here, your shares play that role. The lender evaluates the market value of your shares and offers a loan amount, typically ranging from 50% to 75% of the share value, depending on the lender’s policies and the quality of the shares.

For example, if you own shares worth Rs 10 lakh, you might be eligible for a loan of Rs 5–7.5 lakh. The shares remain in your demat account but are marked as a lien, meaning you can’t sell them until the loan is repaid. You continue to earn dividends and benefit from any price appreciation, while the loan provides immediate liquidity. Repayment is flexible—either as regular EMIs or interest-only payments with the principal settled later, often within 1–3 years.

This financial product is ideal for investors who need funds but don’t want to liquidate their long-term investments, especially if they’re bullish about the market’s future. It’s a win-win: you get cash without sacrificing your portfolio’s growth potential.

Key Benefits of Taking a LAS from Anupam Finserv

Retain Investment Ownership:

The main benefit of LAS is that you are not required to sell your shares. This keeps your long-term wealth-building plan intact and allows you to continue to profit from prospective price increases and dividends.

Quick and Easy Access to Funds: Compared to unsecured loans like personal loans, LAS is processed faster because it’s secured by your shares. Approval can take just a few days, making it ideal for urgent needs.

Low Interest Rates: Because LAS is a secured loan, interest rates are generally lower than those of credit cards or personal loans. Depending on the lender and the state of the market, they can range from 9% to 14% annually.

 Flexible Repayment Options: To give you more cash flow flexibility, many lenders offer flexible repayment plans that allow you to pay only interest each month and pay off the principal at the end of the loan term.

High Loan Amounts: LAS is appropriate for high-priced expenses like business expansion or real estate purchases because it allows you to borrow substantial sums of money, sometimes up to Rs 20 crore, depending on the quality and value of your shares (blue-chip stocks are preferred).

Risks & Limitations of LAS You Should Know

Market Volatility Risk: Your shares’ value may change over time. The lender may issue a margin call, requesting that you pledge additional shares or repay a portion of the loan in order to maintain the loan-to-value (LTV) ratio, if the market crashes and the value of your shares falls sharply. The lender may sell your shares if you don’t comply.

Limited Share Eligibility: Not every share is eligible for LAS. Large-cap, well-known companies that are listed on major exchanges like the NSE or BSE are preferred by lenders. Shares from lesser-known companies or penny stocks might not be accepted.

Interest Costs Add Up: While LAS interest rates are lower than personal loans, they’re still a cost. If you opt for interest-only payments and delay principal repayment, the total interest paid over time can be substantial.

Risk of Losing Shares: If you default on the loan, the lender has the right to sell your pledged shares to recover the outstanding amount. This could mean losing valuable investments at an inopportune time, especially during a market downturn.

Processing Fees and Charges: LAS comes with processing fees, documentation charges, and sometimes renewal fees if you extend the loan tenure. These costs, though small, can add up and should be factored into your decision.

Who Should Consider a Loan Against Shares?

An effective tactic for investors seeking liquidity without jeopardizing their investment objectives is a loan secured by shares. It’s especially helpful for people who need short-term funding but are optimistic about the long-term growth of their portfolio. It is not risk-free, though; careful planning is necessary due to repayment obligations and market volatility. Examine your financial status, the stability of the shares you have pledged, and your capacity for repayment management before choosing LAS.

We at Anupam Wealth are here to help you make wise financial choices.

📞 Connect with us today to Unlock Liquidity Without Selling Your Stocks

🔍 FAQs

  • How much loan can I get against my shares?
    You can typically get 50% to 75% of your share’s market value as a loan.
  • Do I still earn dividends on pledged shares?
    Yes, you continue to receive dividends and benefit from any share price appreciation.
  • What happens if share prices fall after taking LAS?
    If share value drops, the lender may ask you to pledge more shares or repay part of the loan to maintain the margin.
  • Is a Loan Against Shares better than selling shares?
    Yes, it provides liquidity while letting you stay invested for long-term gains.
  • Are there any charges for taking a Loan Against Shares?
    Yes, lenders may charge processing fees, renewal fees, and documentation charges.
The Credit score Story No one told you.

The Credit Score Story No One Told You: How to Improve Your Credit Score in India

Introduction: Your Silent Financial Shadow

Picture this:
You walk into a bank to apply for a home loan. Before you even speak, the banker checks a number—a three-digit code that tells your entire financial story.
Your credit score.
It doesn’t shout. It doesn’t warn. But it speaks louder than words when you need a loan, credit card, or even a rental apartment.
The problem? No one taught you how to read this story—or rewrite it.
Today, we pull back the curtain.

Credit score range chart India from 300 to 900

Chapter 1: What Your Credit Score Is Saying

Your credit score (usually 300–900) is like a financial report card. Here’s how lenders “hear” it:

Credit Score

What It Says About You

Loan Impact

750+ 💎

“I’m responsible—low risk!”

Lowest interest rates, fast approvals

600–749 😐

“I’m okay… but could improve.”

Higher rates, stricter terms

Below 600 ⚠️

“I need financial first aid.”

Rejections or predatory loans

Real-Life Example:

  • Same loan, different scores:
    • ₹30L home loan @ 8% (Score: 780) = ₹2.4L saved vs.
    • ₹30L home loan @ 10% (Score: 650) over 20 years.

That is the power of just 130 points.

Chapter 2: The 5 Secrets No One Told You

  1. Your Credit Score Is Not Just About Loans

It affects:

  • Renting a home (Landlords check it).
  • Mobile plans (Postpaid connections).
  • Job offers (Some companies verify financial health).
  1. Small Mistakes Have Big Consequences
  • A single missed EMI can drop your score by 50–100 points.
  • Maxing out credit cards (even if repaid) screams “cash-strapped.”
  1. Checking Your Score ≠ Lowering It
  • Myth: “Checking my score hurts it.”
  • Truth: Checking your own report is a “soft inquiry” (no impact).
  1. Old Debts Don’t Just Vanish
  • That forgotten ₹5,000 phone bill from 2018? Still haunting your report.
  • Fix: Clear “zombie debts” or dispute errors.
  1. You Can Build Credit Without Debt
  • Building credit without debt is smart! Use a secured credit card, backed by your own Fixed Deposit. This way, you establish a strong credit history by making timely payments, with your savings as collateral.
  •  For instance, IDFC FIRST Bank’s FD-backed credit cards like the WOW! or EARN cards let young people responsibly build a good credit score, opening doors to future financial opportunities without taking on risky debt.

Chapter 3: Rewrite Your Story

The 30-Day Credit Rescue Plan

Want to boost your credit score significantly in just six months? Here’s how to do it with discipline.

1) Set up EMI auto-debits for all your credit payments; this ensures you never miss a due date, potentially adding 20-50 points to your score.

2) Always keep your credit utilization below 30%—meaning if you have a ₹10,000 credit limit, try to spend no more than ₹3,000. This alone can give you a 30-point bump.

3) Don’t close old credit cards, as a longer credit history positively impacts your score, usually by around 15 points.

4) Consider mixing credit types, like having both a credit card and a loan, which can add 10 points if managed responsibly.

5) Dispute any errors in your CIBIL report to remove false negatives that might be dragging your score down.

Follow these steps consistently, and you could see your credit score improve by over 100 points!

Chapter 4: The Ultimate Credit Hack

Think Like a Lender

Banks do not just want repayments—they want predictability.

Do this:

  • Be boringly consistent (same job, address, on-time payments).
  • Avoid sudden credit applications (multiple inquiries = red flag).

Epilogue

Your credit score is far more than just a number on a report; it’s a powerful reflection of your financial reliability and a critical tool that shapes your future opportunities. Think of it as:

  • Your ticket to homeownership: A strong credit score can unlock the doors to your dream home by qualifying you for a mortgage and securing you the most favourable interest rates, saving you substantial money over the loan’s lifetime.
  • Your key to lower car loan rates: When it is time to buy a car, a good credit score means lenders see you as less of a risk, translating directly into lower interest rates on your car loan. This can save you thousands of rupees and make your monthly payments much more manageable.
  • Your financial reputation: In essence, your credit score is your financial resume. It tells potential lenders, landlords, and even some employers that you are responsible and trustworthy. A good score builds a robust financial reputation, making it easier to access credit when you need it and at terms that benefit you.

The good news? It is never too late to start a new chapter and improve your financial standing. Whether you are just beginning your credit journey or looking to repair past missteps, every positive action you take from today onwards contributes to a stronger financial future and increased opportunities.

We help you:

  • Check your score for free (no hidden terms).
  • Fix errors in your credit report.
  • Build a plan to reach 750+.

📞 Connect with us today to start your credit comeback story!

 

🔍 FAQs

  • How can I quickly improve my credit score?
    Pay EMIs on time, keep your credit card usage below 30% of your limit, and clear old debts.
  • Does checking my credit score reduce it?
    No, checking your own credit score is a soft inquiry and does not affect your score.
  • Why did my credit score drop suddenly?
    Common reasons include missed EMIs, high credit card usage, or errors in your credit report.
  • Can I get a loan with a low credit score?
    Yes, but you may face higher interest rates or stricter loan terms.
  • Is it good to close old credit cards?
     No, keeping old credit cards open helps maintain a longer credit history, which boosts your score.