₹10,000 - ₹25 Cr
Loan of up to 80% of policy value| Funding against policies under lock-in period
Overview
Should You Borrow Against Investments Instead of Selling Them
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Eligibility criteria for loan against mutual funds
## In summary
Benefits of loan against mutual funds include retained ownership, portfolio-backed liquidity, and digital access.
* Loan against securities benefits include 90% LTV, equity may reach 50%, while debt may reach 80–85%.
* Interest ranges from 7% to 12% subject to terms and conditions
* Pledged units remain invested, retaining market-linked return potential.
* OTP-based processing may credit approved funds within 24 hours.
* Eligible floating-rate individuals can prepay without foreclosure charges.
Eligibility criteria for loan against mutual funds
Applicants must satisfy personal, portfolio, and verification requirements before their mutual fund holdings can support a borrowing limit from lenders.
Criterion Bajaj Finance requirement Nationality Indian resident Age 21 to 90 years Employment Salaried or self employed Portfolio value Minimum Rs. 50,000 Find status Units must appear within the approved scheme list Verification Valid PAN, KYC, and ownership records Not sure if you qualify? Check your eligibility instantly and see how much you can borrow no commitment required.
Evaluate loan amount eligibility
Bajaj Finance may assign up to 90% of eligible fund value, although applicable percentages vary across equity and debt schemes.
| Portfolio detail | Illustrative value |
| Eligible portfolio value | Rs. 5 lakh |
| Maximum LTV | Up to 90% |
| Indicative limit | Up to Rs. 4.5 lakh |
Want to calculate your eligible loan amount? Try the loan against mutual funds calculator for an instant estimate.
How loan against mutual funds works?
How to Secure a Rs. 2 Crore Loan Against Securities Instantly
| Stage | What happens |
| Application | Personal and portfolio details are submitted |
| Pledge | A lien restricts redemption of selected units |
| Assessment | LTV, NAV, and scheme eligibility determine drawing power |
| Utilisation | Interest applies to the withdrawn amount |
| Closure | Repayment enables release of the lien |
For example, pledging mutual funds worth Rs. 5 lakh at 80% LTV can provide drawing power of approximately Rs. 4 lakh.
Documents required for loan against mutual funds
Lenders generally requires three records to verify an applicant's identity, KYC compliance, and ownership of eligible mutual fund investments.
| Document category | Accepted record |
| Identity | PAN Card |
| KYC Verification | Aadhaar card, passport, or voter’s ID |
| Investment ownership | Consolidated Account Statement showing mutual fund holdings |
Step-by-step process to applying for a loan against mutual funds
How to apply for Bajaj Finance loan against shares
The online application allows eligible investors to complete verification of the loan against mutual funds section, select approved funds, authorise lien marking, and receive sanctioned liquidity digitally.
Step 1: Visit the application page and verify your mobile number using OTP
Step 2: Provide PAN, personal, KYC, and bank information
Step 3: Review eligible schemes retrieved from your portfolio
Step 4: Select units and check the offered drawing power
Step 5: Authorise lien marking through the supported registrar
Step 6: Review charges, terms, and margin obligations
Step 7: Accept the agreement and await account disbursal
Why taking a loan against mutual funds is convenient?
This borrowing option combines digital access, retained ownership, flexible utilisation, and portfolio-backed pricing within one manageable financial arrangement for investors.
| Convenience factor | Practical value |
| No compulsory redemption | Eligible investments remain in the portfolio |
| Broad scheme coverage | Over 5,000 funds from more than 40 AMCs |
| Flexible utilisation | Interest applies only to withdrawn funds |
| Longer availability | Tenure ranges from 7 days to 36 months |
| Digital servicing | Statements, repayments, withdrawals, and lien release through My Account |
| Rising portfolio value | Additional credit may become available against increased eligible value |
When is a loan against MF a smart choice?
Features & Benefits for Bajaj Finance loan against shares
A loan against MF suits temporary requirements when investment continuity matters and borrowers have an identified, reliable repayment source available.
- Medical expenses requiring prompt payment before insurance reimbursement arrives
- Education fees due before planned savings or income becomes available
- Temporary business cash-flow gaps supported by expected receivables
- Essential repairs or planned family expenses with defined budgets
Borrowing remains unsuitable for uncontrolled spending, uncertain repayment, speculative activity, or circumstances where outstanding costs could exceed practical benefits substantially.
What to keep in mind before applying?
Applicants should compare benefits, costs, investment restrictions, market fluctuations, and repayment consequences before authorising a lien on mutual fund units.
| Consideration | What to review |
| Interest rate | 7% to 12.25% p.a., depending on applicable terms |
| Processing fee | Up to 4.72% of the loan amount, inclusive of applicable taxes |
| LTV movement | NAV declines may reduce drawing power |
| Margin shortfall | Additional units or partial repayment may become necessary |
| Unit restrictions | Pledged units cannot be redeemed until lien release |
| Repayment capacity | Borrow only against a clear and dependable repayment source |
Conclusion
Eligibility criteria for Bajaj Finance loan against shares
This loan against securities facility provides liquidity without compulsory redemption, while allowing eligible units to retain market-linked return potential throughout. Its usefulness depends on selecting an appropriate limit, understanding fees, monitoring NAV movements, and maintaining repayment capacity throughout the tenure.
Need liquidity without losing your market position? Apply for a loan against mutual funds and make your investments work harder for you.
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Frequently asked questions
General
What is the maximum loan I can get against my mutual funds?
Bajaj Finance offers loans from Rs. 10,000 to Rs. 50 crore against eligible mutual fund portfolios. The applicable LTV can reach 90%, although scheme category, current NAV, approved holdings, and policies determine final drawing power available. For example, an eligible portfolio worth Rs. 5 lakh may support up to Rs. 4.5 lakh under the maximum LTV.
Can I pledge both equity and debt mutual funds?
Yes, most lenders accept both equity and debt mutual funds as collateral. However, the loan-to-value (LTV) ratio may vary—debt funds usually attract a higher LTV compared to equity funds due to lower market volatility and more stable valuations.
Why should I take a loan against mutual funds instead of redeeming my investments?
A loan against mutual funds preserves compounding and market participation while providing liquidity. It may also avoid applicable exit loads and defer capital gains tax that redemption could trigger.
What happens if the value of my MFs falls after taking the loan?
If your mutual fund value drops significantly, the LTV ratio may exceed permissible limits. In such cases, the lender might ask you to either pledge additional units or repay a portion of the loan to restore the required margin.
Can I prepay or close the loan early?
Yes, you can usually prepay or foreclose the loan at any time. Many lenders allow early repayment without any foreclosure charges, but it's advisable to check your loan agreement for any applicable fees or conditions beforehand.
What is the convenience of taking a loan against mutual funds?
A loan against mutual funds allows you to access funds without selling your investments. It’s quick, paperless, and flexible helping you manage short-term needs while your investments continue to grow.
Can I continue to earn returns on mutual funds after taking a loan?
Yes, you still earn returns since your mutual funds remain invested. Only a lien is marked on your pledged units, meaning you retain ownership and benefit from market appreciation.
How fast can I get funds after applying for a loan against mutual funds?
You can receive funds within a few hours of applying if your KYC and mutual fund details are verified. The digital process ensures swift approval and instant disbursal.
What happens if I default on a mutual fund loan?
In case of default, the lender may redeem pledged mutual fund units to recover dues. It’s advisable to repay on time to maintain your credit score and avoid liquidation of investments.
Are there any hidden charges or processing fees?
No hidden charges apply. However, lenders may levy nominal processing fees or interest on the utilised amount. Always review the loan terms and charges before applying to ensure transparency.
Is a loan against mutual funds better than a personal loan for urgent needs?
Yes, if you have eligible holdings, a loan against mutual funds is typically better for urgent needs because interest rates are generally lower (9–15% p.a.) than personal loans (11–24% p.a.). The benefits of loan against mutual funds include retaining your investments while accessing funds. If you're wondering why should you take a loan against mutual funds, consider it when you need liquidity without redeeming your portfolio.
Does taking a loan against mutual funds affect my credit score?
Yes, a loan against mutual funds appears on your CIBIL report, and timely repayments can improve your credit score, while defaults can negatively affect it. Apply online with Bajaj Finance—the process is fully digital and OTP-verified.
Which mutual funds are eligible for pledging in India?
A loan against mutual funds generally accepts most open-ended equity, debt, and hybrid schemes from SEBI-registered AMCs, while closed-ended funds and ELSS units under the lock-in period are typically not eligible.
Which one should you choose: loan against mutual funds vs. personal loan?
A loan against mutual funds may be the better choice if you need short-term funds without redeeming your investments, while a personal loan may suit you if you lack eligible mutual funds to pledge. Choose based on your funding needs, repayment capacity, and available assets.
Disclaimer
1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company(BAJAJ FINANCE) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.
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