Personal Loan vs Loan Against Securities
When a financial need arises, most people reach for a personal loan. It is familiar and requires no collateral. But for investors who hold mutual funds, shares, or insurance policies, there is a better-suited alternative: a Loan Against Securities (LAS).
It is cheaper, faster, and does not require selling assets built for the future.
At a Glance
| Feature | Loan Against Securities (SLiQ) | Personal Loan |
|---|---|---|
| Interest rate | Starting at 9.99% p.a. | 14% – 30% p.a. |
| Interest charged on | Amount withdrawn only | Full loan amount from day one |
| Credit score required | Not required | Usually 700 and above |
| Disbursement | Within 6 hours | 2 – 5 business days |
| Prepayment charges | NIL | Often 2% – 5% of outstanding |
| Your investments | Stay invested | Not involved |
| Loan structure | Revolving overdraft | Fixed EMIs |
Interest Rate: The Biggest Difference
Personal loans are unsecured, which means higher risk for the lender and higher rates for the borrower, typically 14% to 30% p.a.
LAS is secured by the portfolio, which brings rates down. On SLiQ, LAS starts at 9.99% p.a. And unlike a personal loan which charges interest on the full sanctioned amount from day one- SLiQ's LAS charges interest only on the amount actually withdrawn, calculated daily.
Rs 3 lakh borrowed for 4 months:
- Personal loan at 18% p.a. → interest of approximately Rs 18,000
- LAS on SLiQ at 10% p.a. → interest of approximately Rs 10,000
Same need. Nearly half the cost.
Eligibility: No Credit Score Required
Personal loans require income proof, employment documentation, and a CIBIL score typically above 700.
LAS eligibility on SLiQ is based on the portfolio - not the credit profile. No minimum credit score. No income proof. Self-employed individuals, business owners, and retirees with investment portfolios can qualify. SLiQ does not run a hard CIBIL inquiry, so even checking the available limit has no impact on the credit score.
What Happens to the Investments?
With LAS, a lien is placed on the pledged securities - a digital hold that restricts redemption but leaves the investment intact. The portfolio continues to earn returns, SIPs run normally, and no capital gains tax is triggered. Once the loan is repaid, the lien is released immediately.
Nothing is sold. Nothing is lost.
Repayment: Flexible vs Fixed
A personal loan locks the borrower into fixed EMIs, with prepayment charges of 2% to 5% if closed early.
LAS on SLiQ is a revolving overdraft, repay anytime, in part or full, with zero charges. Each repayment restores the available limit, so funds can be drawn again without reapplying.
When to Choose Which
- Mutual funds, shares, or an insurance policy are available to pledge
- A lower rate and flexible repayment are priorities
- The need is short to medium term
- No securities are available to pledge
- A fixed EMI structure over a long tenure is specifically needed
For investors with an existing portfolio, LAS is almost always the more cost-effective and flexible option.
Check your eligible loan amount on SLiQ - free, instant, no CIBIL check.
Disclaimer: Interest rates are indicative and may vary by lender and borrower profile. This article is for informational purposes only and does not constitute financial advice.
