How to take a Loan Against Mutual Funds

A loan against mutual funds provides access to money without requiring the immediate sale of eligible units. However, every benefit should be considered with its related cost or condition.

The main benefits include:

• Liquidity without redemption: You can borrow against approved units while they remain invested and exposed to market movements.
• Defined disbursal timeline: Eligible Bajaj Finance applications may receive funds within 24 hours after approval and verification.
• Interest on utilisation: Interest applies only to the amount withdrawn, not the complete assigned limit.
• Digital application: A loan against mutual funds can be processed online through OTP verification, KYC, digital lien marking, and e-signing.
• Flexible funding use: You may use the amount for education, healthcare, a planned purchase, business requirements, or another permitted need.
• Portfolio access: The facility covers over 5,000 approved schemes from more than 40 AMCs.

LAMF is a secured loan, but it is not credit-score neutral. The lender may review your credit profile, and delayed payments or default can affect your credit record.

Bajaj Finance considers your nationality, age, employment, portfolio value, KYC status, and eligible mutual fund holdings.

Meeting these conditions does not guarantee approval. The final decision depends on successful verification, fund eligibility, applicable LTV, credit assessment, and Bajaj Finance’s internal policies.

Which documents do you need?

Keep your identity, address, investment, and bank information ready before starting the application.

The lender may request additional information if your KYC, portfolio, or bank details require further verification.

A loan against mutual funds creates interest, repayment, and collateral obligations. Review the complete cost and risk before accepting the facility.

Compare your required amount with the eligible loan against mutual fund eligibility limit. Borrow only an amount that you can repay within the agreed tenure.

Bajaj Finance accepts more than 5,000 approved mutual funds from over 40 AMCs. However, owning a mutual fund does not automatically make it eligible for a loan.

The commonly considered categories include:

• Equity mutual funds: Approved diversified and equity-oriented schemes may be accepted, subject to a lower LTV where volatility is higher.
• Debt mutual funds: Eligible liquid, short-duration, and other debt schemes may receive a higher LTV because their NAV generally fluctuates less than equity funds.
• Hybrid mutual funds: Selected schemes may qualify based on their equity-debt allocation, liquidity, and risk.
• Index funds and ETFs: Selected schemes may qualify if they appear on the lender’s approved list and meet the applicable holding requirements.

Highly volatile, sector-specific, closed-ended, ELSS, or near-maturity schemes may not qualify. Final eligibility depends on the approved list, fund category, liquidity, available units, and current lender policy.

Bajaj Finance determines the final rate and charges based on the application, pledged fund type, loan amount, and applicable terms.

Prepayment charges depend on the sanctioned amount:

If the primary borrower is an individual or Micro and Small Enterprise with a floating-rate loan, no foreclosure or part-prepayment charge applies, irrespective of the repayment source or lock-in period. Read the Key Fact Statement for the final interest rate, effective annual rate, penal charges, third-party charges, and repayment schedule.

1. Open the application form: Click ‘Apply Now’ at the top of the page.
2. Enter your details: Provide your name, email ID, and mobile number.
3. Add portfolio information: Enter your total portfolio value and select ‘Mutual Funds’ under ‘Type of Securities’.
4. Confirm your location: Select your city, accept the terms and conditions, and click ‘Submit’.
5. Complete OTP verification: Enter the OTP sent to your registered mobile number.

A loan against mutual funds can provide temporary liquidity without selling eligible units, but it also creates interest, repayment, and margin obligations. Check whether your scheme is approved, compare the applicable LTV and total charges, and confirm that you can handle a fall in NAV. Keep enough money for monthly interest and possible margin shortfalls. If repayment may be difficult, consider whether redemption or another funding option better fits your position. Read the Key Fact Statement before accepting the loan.