Loan Against Mutual Funds

BFL offers loans up to 90% of the value of your funds, where the valuation of your funds is updated every 5 mins. Hence, if the value of your funds increases during the tenure of the loan, the eligible pre-assigned loan limit will increase. Similarly in case the value of the fund falls, the pre-assigned loan limit will reduce proportionally. This would be subject to the “Sanction limit” not getting breached.

To raise a request for additional disbursement, please choose the 'Disbursement Request’ option in the Loan against securities service section available under the ‘My Relations’ tab.

Please note that it is subject to LTV being continued to be maintained with respect to the securities pledged and principal outstanding.

For mutual fund schemes, it is updated at the end of every day.

90% LTV is always required to be maintained for loan against funds facility. LTV may alter as a result of regulatory changes. Any shortfall in the maintenance of the 90% LTV occurring on account of movement in the fund prices shall be filled within 7 business days.

Further, in case the Drawing Power (DP) to Loan value falls more than 85% then BFL will go ahead with the liquidation of mutual funds with an intimation to the borrower.

You can repay the shortfall or mark a lien on additional mutual funds to make the shortfall good.

In case you fail to fulfil the shortfall within 7 business days, Bajaj Finance Limited holds the right to sell the lien marked mutual funds to make good the shortfall.

You can release securities, provided you are not in shortfall and have excess withdrawable funds available. The request will be processed within minimal time post verification.

The interest rates associated with Loan Against Mutual Funds are from 8% to 15% per annum.

At Bajaj Finserv, we offer flexible repayment options to make managing your Loan Against Shares as convenient as possible. Here's a breakdown of how it works:

• Repayment schedule: Your repayment schedule will be determined based on the loan tenure you choose (up to 36 months) and the loan amount. This schedule will outline your monthly installments, including the principal and interest components. You'll receive a detailed repayment schedule upfront, so you're fully aware of your financial commitment.
• Repayment methods: We offer multiple convenient repayment methods to suit your preferences.
• Interest calculation: Interest is calculated on the amount you utilize from your pre-approved credit limit, and only for the period you use it. This means you save on interest costs by borrowing only what you need and when you need it.

Generally, no. Taking the loan itself isn't a taxable event because you're not selling the units. Tax implications arise when you eventually sell the units, triggering capital gains tax. Interest paid on the loan may be tax-deductible under certain conditions (e.g., for higher education). Consult a tax advisor for personalized advice.

Yes, you can apply for a top-up on your existing loan against mutual funds, subject to eligibility and the lender's terms. The approval depends on factors like the current value of your pledged mutual funds and your repayment history.

The tenure for a loan against mutual funds varies by lender and is typically flexible. It's essential to discuss and agree upon the repayment period with your lender before availing the loan. 

When you take a loan against mutual funds, the units are pledged to the lender but remain in your ownership. You continue to benefit from any dividends or capital appreciation but cannot redeem or sell the pledged units until the loan is repaid.     

Currently, the loan against mutual funds facility through Bajaj Finserv is available only to Indian residents. NRIs are not eligible for this service.

If you repay your loan amount after 6 PM, the repayment will be adjusted in the loan account on the next business day. Payments made before 6 pm on any business day, the same will be adjusted in the loan account, on same day. 

Example: If you make a repayment at 7 PM on a Tuesday, it will be adjusted in your account on Wednesday be adjusted on Monday (assuming Wednesday is a business day).

If you make a payment after 3 PM on the last business day of the month, the repayment will be adjusted in your loan account on the next business day. This is to ensure that end-of-month processing is completed smoothly.

Example: If the last business day of the month is Friday and you make a payment at 4 PM, the repayment will be adjusted on Monday (assuming Monday is a business day).