Debunking Common Myths About Loan Against Stocks

Last Updated on Mar 5, 2026 by Ayushi Gangwar

In today’s financial landscape, flexibility is key. Yet many investors remain unaware of how they can leverage their existing investments to access liquidity without selling their assets. Loan Against Stocks (LAS) offers this exact solution, but several misconceptions prevent investors from taking advantage of it.

Let’s separate fact from fiction and explore the realities behind some common myths about Loan Against Stocks.

Table of Contents

Myth 1: You Can’t Borrow Against Your Investments

Reality: You can indeed borrow against a wide range of market-linked investments. Your stock portfolio isn’t just a growth asset – it’s also a potential source of immediate liquidity. Most listed stocks, equity mutual funds and ETFs can serve as collateral for loans, allowing you to access funds without disrupting your long-term investment strategy.
This option provides dual benefits: you retain ownership of your investments (continuing to earn dividends and benefit from potential market appreciation) while simultaneously accessing funds for immediate needs.

Myth 2: LAS is only for high-net-worth individuals

Reality: LAS is accessible to investors across the spectrum. As long as you hold quality stocks in your portfolio, you can apply for LAS regardless of your net worth.

With minimal portfolio requirements, this financial tool is available to all investors who need liquidity without liquidating their investments.

Myth 3: LAS is too risky; you’ll lose your stocks

Reality: The risk of losing your stocks exists only if you fail to manage your loan properly. With responsible borrowing and timely repayments, your portfolio remains secure.

Financial institutions implement safeguards like maintaining a margin, which creates a buffer against market fluctuations. As long as you stay within your borrowing capacity and manage your repayments well, your investments remain safe. Moreover, even in cases of market volatility, you’ll receive thorough notifications and margin calls well in advance, giving you multiple opportunities to add funds or take corrective action before any liquidation occurs. The process is transparent, with clear communication at every step to ensure you’re always informed about your loan status.

Myth 4: The interest rates on LAS are very high

Reality: LAS is actually one of the most cost-effective borrowing options available to investors. Since your loan is secured by your stocks, the lender’s risk is lower, resulting in more favourable interest rates compared to unsecured loans.

On Tickertape, you can access a loan against your stocks at just 10.4% to 10.9% per annum – significantly lower than personal loans or credit card interest rates, which can range from 14% to 36%. This makes LAS an attractive option for short to medium-term financing needs.

Myth 5: You must repay the loan in one lump sum

Reality: LAS offerings provide remarkable flexibility in repayment options. Depending on your financial situation, you can choose to:

Pay only the monthly interest on the outstanding loan, similar to a Loan Against Mutual Funds
Make partial prepayments when you have surplus funds
Extend your loan tenure based on your specific needs
Monthly payments also reduce if a partial repayment is made.

This flexibility allows you to align loan repayment with your financial planning, making LAS a versatile financial instrument.

Myth 6: You can’t take LAS and LAMF together

Reality: You absolutely can take LAS and LAMF to maximise your borrowing potential. If you already have a LAMF, you can top up your loan with LAS using your stock portfolio as additional collateral. Similarly, if you have an existing LAS, you can enhance your loan amount by adding LAMF using your mutual fund investments.

This flexibility allows you to leverage your entire investment portfolio, both stocks and mutual funds, to access the liquidity you need. The only restriction is that you cannot take LAS over an existing LAS, but the combination of LAS and LAMF provides greater financial flexibility and higher loan amounts based on your diversified portfolio.

Myth 7: Applying for LAS is complicated and time-consuming

Reality: Gone are the days of paperwork-heavy, weeks-long loan processes. The digital revolution has transformed the LAS application into a seamless experience. On Tickertape, the entire process from application to disbursement is digitised and can be completed in a few minutes with just a few steps:

Check your available credit limit for LAS
Select the amount you want to withdraw and the corresponding stocks or ETFs to pledge as collateral
Enter your personal details
Complete a simple KYC verification
Receive funds directly in your bank account

Most applications are processed and approved within the hour, with funds disbursed by 12 PM the next day.

Conclusion

Loan Against Stocks is a powerful financial tool that offers liquidity while allowing you to maintain your market position. By understanding the realities behind these common myths, you can make more informed decisions about whether LAS is the right solution for your financial needs.

With competitive interest rates, flexible repayment options, and a streamlined application process, Tickertape’s LAS offering provides a practical way to access funds without disrupting your investment journey.

Whether you need capital for personal expenses, business opportunities, or emergencies, LAS can be a strategic addition to your financial toolkit, helping you make your investments work harder for you.