Loan or Sell Shares?

I'm doing Home Improvements and need money fairly pronto. 
I have a lot of shares but they've heavily depreciated over the years and are at -34% of their original value.
If I take a loan out now, I'm looking at a 10% interest rate. Over the term I've plugged in, I'll be paying back an extra £1,500 in interest over 4-5 years. However, with my shares, I make about £2,000 a year in dividends. 
Would it be best to cash in some shares or take out a loan?
I'm pretty sure I could pay the loan back more quickly than the terms I'm signing up to and am fairly sure I don't get penalised for making early repayments, do I?
Thanks, all!


  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    edited 28 July 2022 at 8:39AM
    If your figures are correct, then the loan, as it will cost you less.

    Any penalties for early repayments will be in the lender terms.
  • MEM62
    MEM62 Posts: 4,746 Forumite
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    -34% over what period?  Cash in your shares and you crystalize your losses.  Ride out the dip and you share values will recover - assuming you are not invested in something left-field and high risk.  
  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320 Forumite
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    As ZX81 says, taking your figures at face value, the loan would be the cheaper option.
    Another possibility may be to look at a credit card that offers 0% on purchases.  This comes with a few caveats: you may not be accepted for one, you may not be offered a sufficiently high limit, your suppliers/tradesmen may not accept credit cards.  And if you are able to make use of this option, you must be absolutely sure you're able to repay the total balance by the time the promotional rate expires, otherwise the interest charges would dwarf what you're saving on the loan/sell shares options.
    Depends to a large extent on the nature of the work, the sums involved, and possibly whether you're able to do the work piecemeal (do the first tranche of work, pay on credit card, in a year's time apply for another card and use that to pay for the second tranche of work, etc.)
    This may not be a feasible option, depending on your circumstance, but it may be worth looking into.
  • pmartin86
    pmartin86 Posts: 755 Forumite
    First Anniversary Name Dropper First Post
    Far too much information missing to even begin to help here - what shares? what period are you down 34%? how much is invested vs how much loan do you need? What yield are you getting to get to £2,000 a year?
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