What are the advantages of availing loan against mutual funds?
Opting for a loan against mutual funds brings along a host of benefits. Here is why it’s gaining popularity:
Lower interest rates
Because it’s a secured loan, the interest rates are much lower than personal or business loans.
Quick access to funds
The application process is fast, mostly online, and requires minimal documentation. You can get funds almost instantly.
No need to sell your mutual funds
Your investments remain intact. You still benefit from potential returns and do not lose ownership.
Pay interest only on what you use
You only pay interest on the amount you actually withdraw, not the total sanctioned limit.
Ideal for short-term needs
Whether it's an emergency or a short-term requirement, LAMF is a low-stress way to raise capital.
Why redeem when you can borrow? Apply now for a loan against mutual funds and stay invested for future growth.
What is the eligibility criteria for a loan against mutual funds?
Getting started is simple. You are eligible for a loan against mutual funds if:
You are an Indian citizen.
You are salaried or self-employed.
You pledge mutual funds worth at least Rs. 50,000.
You fall within the prescribed age bracket.
These criteria may vary based on the lender’s discretion, so always double-check the terms before applying.
Own mutual funds worth Rs. 50,000 or more?
You may be eligible for a loan against securities. Click to apply
How can I use loan against mutual funds?
A loan against mutual funds is incredibly versatile. Here are some real-world ways to use it:
Emergency expenses
Medical bills, urgent travel, or unforeseen repairs can be handled without breaking your investments.
Education
Fund tuition, certifications, or children’s academic needs without dipping into long-term savings.
Business needs
Manage cash flow, invest in growth, or fund operational expenses easily.
Home renovation
Upgrade your home interiors or fix that leaky ceiling without compromising investments.
Wedding expenses
Manage big-ticket ceremonies and functions without disturbing your financial planning.
Travel
Finance that long-pending international trip, guilt-free.
Large purchases
Buy appliances, furniture, or make a vehicle down payment using your mutual fund’s value.
Turn your portfolio into a financial safety net
Apply for a secured loan against mutual funds and cover expenses without stress.
What are the documents required to avail loan against mutual funds?
Here’s what you will typically need to apply:
KYC documents (Aadhaar, passport, or voter ID)
PAN card
Consolidated Account Statement (CAS) of your mutual fund holdings
Any other loan/security documents specified by the lender
These documents help verify identity and investment value before loan disbursement.
How to apply for a loan against mutual funds?
Applying for a loan against mutual funds is easier than ever:
Choose a lender that offers LAMF services.
Fill out the application either online or in-branch.
Upload required documents including your KYC and MF statements.
The lender will mark a lien on your mutual fund units.
Post verification, the loan will be approved and disbursed to your account.
You can then use the funds as you wish with complete flexibility.
Interest rates and charges of loans against mutual funds
Because these are secured loans, interest rates are lower than unsecured loans like personal or credit card loans. But here are some potential charges to be aware of:
Processing fee – Usually a small percentage of the loan amount.
Lien marking fee – For initiating the lien on your mutual fund units.
Prepayment charges – Some lenders may charge if you repay early.
Renewal fee – If you wish to extend your loan tenure.
Interest rates can vary depending on the type and value of mutual funds you pledge, so it’s best to compare options.
What are the factors you should consider before investing in a loan against mutual funds (LAMF)?
Before you take the plunge, keep these factors in mind:
Loan-to-value (LTV): This determines how much loan you can get compared to your investment value.
Interest rate: Always compare across lenders to get the best deal.
Eligibility of funds: Not all mutual funds are accepted—check with your lender.
Repayment flexibility: Look at tenure, EMI structure, and part-prepayment options.
Market fluctuation risk: A drop in NAV could affect your loan eligibility or trigger a margin call.
Conclusion
A loan against mutual funds is one of the most efficient and smart financing tools out there. It helps you stay invested while getting instant access to funds at lower interest rates. Whether you are dealing with a cash crunch, planning a big event, or exploring a short-term opportunity this secured loan can step in without disrupting your long-term goals.
So the next time you are short on funds, ask yourself this:
Why redeem when you can borrow and stay invested?
Do not let emergencies derail your investments. Apply now for a loan against mutual funds and enjoy liquidity without compromise.