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Why go for Loan Against Shares?

If you avail a loan against shares, you sign an undertaking wherein you agree to pledge your shares for a value. You can avail a LAS against your bonds, mutual funds, Fixed maturity plans (FMP), insurance policies or Employee stock option plan (ESOP). You will continue to enjoy all the rights of a shareholder over your shares like bonuses, right shares and dividend, while you get liquidity to tackle your financial needs.

A loan against shares can be availed as an overdraft facility in your account, from where you can withdraw as much money as you want. The interest will be charged only for the amount you have a from your account and the interest will be calculated on the basis of the period you have used the amount for. It is much better than selling your shares, but you just pay interest on the amount you borrow.

The eligibility criteria are:

  • You can avail a LAS by fulfilling simple eligibility criteria.
  • You must be an Indian resident
  • You must be at least 21 years of age
  • You must have a steady income as a salaried employee or a self-employed professional
  • The securities that you pledge should be of a minimum value of Rs. 10 lakh
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