Eligibility criteria
Every lender has a few basic requirements before they offer you a loan. For a loan against mutual funds, eligibility is generally simple:
- Age: Must be 18 years or above (some lenders set 21 as the minimum).
- Mutual fund ownership: You must own mutual funds in approved schemes.
- Credit score: A decent credit score boosts your chances.
- Income proof: Helps lenders assess your repayment capacity.
Own mutual funds? You are likely already eligible. Check if you qualify and apply online in minutes.
Loan against mutual funds vs other types of loans
If you are confused between a personal loan and a loan against mutual funds, here’s the key difference: the latter is secured by your investments and usually has a lower interest rate.
Type of Loan
|
Interest rate
|
Collateral required
|
Flexibility
|
Personal loan
|
High (10–24%)
|
No
|
High
|
Loan against mutual funds
|
Lower (8–15%)
|
Yes, MF units
|
High
|
Home/Auto loan
|
Lower
|
Yes – Property/Vehicle
|
Limited use
|
Business loan
|
Varies
|
May or may not be needed
|
High
|
Loan amount and interest rates
How much you can borrow depends on the value of your mutual fund units and your eligibility. Interest rates are typically lower for secured loans.
Loan type
|
Loan amount
|
Interest rates
|
Personal Loans
|
Up to Rs. 25 lakhs
|
10% – 24%
|
Home Loans
|
Up to 90% of property value
|
7% – 9%
|
Auto Loans
|
Up to 100% of on-road price
|
8% – 15%
|
Education Loans
|
Up to Rs. 20 lakhs
|
9% – 15%
|
Business Loans
|
Up to Rs. 50 lakhs or more
|
12% – 20%
|
Loan Against Mutual Funds
|
Up to 90% of NAV of funds
|
8% – 15%
|
Step-by-step application process
Wondering how to take loan against mutual fund? It’s easier than you think. Here’s how it works with Bajaj Finserv:
- Apply: Go to the Loan Against Mutual Funds page and hit “Apply”.
- Enter details: Share your name, PAN, and date of birth.
- Email verification: Verify your email ID.
- Portfolio access: Enter your mobile number to fetch fund details from CAMS and KFintech.
- Select funds: Pick the mutual funds and units you want to pledge.
- Loan offer: Get an offer based on your fund value.
- Lien marking: Authorise lien with OTP from your registered mobile.
- KYC and bank check: Complete your KYC and bank account verification.
- Agreement: Review and sign the loan agreement online.
- Disbursement: Get the money directly in your account.
Required documents
You don’t need a pile of paperwork to apply. Just keep these ready:
- PAN card
- KYC proof (Aadhaar/Passport/Voter ID/Driving Licence, etc.)
- Consolidated Account Statement (for mutual fund holdings)
Quick documentation. Instant processing. Pledge, apply, and receive funds all online. Apply now
Repayment terms
Repaying your loan is simple and flexible. Here’s what to expect:
- Tenure: Choose from a few months to a few years.
- EMIs: Pay in monthly instalments based on the loan and interest.
- Repayment frequency: Mostly monthly, but some flexibility exists.
Advantages and disadvantages
Here’s a quick glance at the pros and cons:
Advantages:
- Lower interest rates (as it’s a secured loan)
- No need to sell mutual funds
- Quick access to large funds
- Flexible use of money
Disadvantages:
- Risk of fund lien if repayments fail
- Not for those without mutual fund investments
- Slight paperwork for first-time applicants
Need liquidity but want to stay invested? A loan against mutual funds gives you both. Apply now
Conclusion
When choosing a loan, it’s important to consider your financial needs, repayment capacity, and the type of asset you’re willing to pledge. A loan against mutual funds is a great option if you need funds urgently but don’t want to sell your investments. With easy online application, minimal paperwork, and competitive interest rates, this option helps you handle short-term needs while keeping long-term goals intact.
Still thinking about how to take loan against mutual fund? Check your eligibility and apply online today at Bajaj Finance. Get started
