Need ₹10 Lakh for a Medical Emergency? Here's How LAS is Still Better Than A Personal Loan

When a sudden medical emergency hits, arranging funds quickly becomes a priority. A personal loan may seem like the easier option because it offers quick disbursal, flexible tenures, and no collateral. But if you own stocks, mutual funds, or bonds, a Loan Against Securities (LAS) could be a much smarter, more cost-effective choice.

Let’s compare the two options using real EMI data for a ₹10 lakh loan over 2 years.

Scenario 1: Personal Loan of ₹10 Lakh at 15% for 2 Years

Personal loans come with high interest rates, especially if unsecured. Over 2 years, you end up paying over ₹1.6 lakh in interest. Here’s how:

• Interest Rate: 15% p.a.
• Monthly EMI: ₹48,487
• Total Interest Paid: ₹1,63,680
• Total Repayment Amount: ₹11,63,680

Scenario 2: Loan Against Securities (LAS) of ₹10 Lakh at 10% for 2 Years

LAS offers much lower interest rates, often between 9%–12%. It is determined based on your portfolio’s value. By choosing this option, you can save nearly ₹56,000 in interest payments. Here’s the full math of it:

• Interest Rate: 10% p.a.
• Monthly EMI: ₹46,145
• Total Interest Paid: ₹1,07,478
• Total Repayment Amount: ₹ 11,07,478

Summarising the Benefits of LAS Over Personal Loan

By opting for LAS instead of a personal loan, you save ₹56,202 in interest over 2 years. This money could go towards building an emergency fund that could guarantee financial stability during uncertain times.

Can Anyone Opt for an LAS Facility in an Emergency?

No. Before deciding to avail an LAS facility, you must keep the following things in mind:

• You must own liquid securities like shares, mutual funds, or bonds.
• Market volatility could affect your pledged portfolio’s value.
• If asset value falls, you may be asked to top up the security or repay early.
• LAS is best suited for short-term or emergency funding when you don't want to redeem investments.

Read more: How Did A ₹20,000 SIP in the UTI Flexi-Cap Fund Turn Into Nearly ₹16 Lakh in 5 Years?

Conclusion

If you have market investments and need emergency funds, LAS offers faster, cheaper access to credit, without disrupting your portfolio. Especially during medical emergencies, every rupee counts, and saving over ₹50,000 on interest is a decision worth considering.  

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all related documents carefully before investing.