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What a loan against shares is, how to get one, interest rates — a complete guide for Indian investors.
Published by The Retail Trader · AUG 08, 2026 · Features
What a loan against shares is, how to get one, interest rates — a complete guide for Indian investors.
In LAS you pledge your shares and take a loan from a bank. You don't need to sell the shares — the shares stay with you, pledged to the bank.
Simple definition: > LAS = Instead of selling shares, pledge them and take a loan from the bank. You get the shares back when you repay the loan.
Keep these five points in mind:
• You have: Shares worth ₹10 lakh
• The bank gives: 50% loan = ₹5 lakh
• Interest: 9-12% per annum
• Shares: Pledged (mortgaged)
• Repay the loan → You get the shares back
Keep these five points in mind:
• Ownership — LAS: Retained (pledged), Selling Shares: Lost
• Tax — LAS: No capital gains tax, Selling Shares: Capital gains tax applicable
• Future upside — LAS: You keep it, Selling Shares: You don't get it
• Interest cost — LAS: 9-12%, Selling Shares: None
• Best for — LAS: Short-term need, Selling Shares: Permanent exit
Keep these six points in mind:
• Loan amount — 50-70% of share value
• Interest rate — 9-12% per annum
• Tenure — 1-3 years (renewable)
• Min loan — ₹50,000-1 lakh
• Processing time — 1-3 days
• Eligible securities — Large cap, liquid stocks
Good Use Cases:
• You have no emergency fund but you have shares
• You need short-term cash (3-12 months)
• You don't want to sell shares (future upside expected)
• You want to avoid a tax event
Bad Use Cases:
• Repaying long-term debt
• Speculative trading
• Shares already down (margin call risk)
• A high-interest alternative is available
If the share price falls, the bank will ask for more collateral. If you don't provide it, the shares will be sold.
You pay 9-12% interest. If share returns are low, you lose out.
The bank can sell the shares if the loan is not repaid.
Keep these points in mind:
• 📌 LOAN AGAINST SHARES (LAS)
• 📊 Pledge shares and take a loan
• 📊 Ownership retained (pledged)
• 📊 No capital gains tax
• DETAILS:
• 📊 Loan: 50-70% of share value
• 📊 Interest: 9-12% per annum
• 📊 Tenure: 1-3 years
• 📊 Processing: 1-3 days
• WHEN TO USE:
• ✅ Emergency cash need
• ✅ Short-term (3-12 months)
• ✅ Don't want to sell shares
• ✅ Avoid capital gains tax
• RISKS:
• ❌ Margin call (price falls → collateral needed)
• ❌ Interest cost (9-12%)
• ❌ Forced selling (the bank will sell)
• LAS vs SELLING:
• 📊 LAS — Ownership retained, interest cost
• 📊 Selling — Ownership lost, tax applicable
• 📊 LAS better if: Short-term need + future upside expected
Keep these points in mind:
• Demat Account Guide | Capital Gains Tax | Risk Management
The Retail Trader — educational market analysis. Not investment advice.
This article is for educational purposes only — it contains no buy or sell recommendation, no claim of guaranteed returns, and no advisory. Rules, rates and mechanics change from time to time at the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.