Eligibility criteria and documents required
Anyone can apply for our loan against mutual funds online, as long as they meet the four basic criteria mentioned below. Also keep a few documents handy while applying for loan against mutual funds.
Eligibility criteria
- Nationality: Indian
- Age: 18 to 90 years
- Employment: Salaried, self-employed
- Security value: Minimum Rs. 50,000
Documents
- PAN card
- KYC documents: Aadhaar/ passport/ voter’s ID
- Consolidated Account Statement
Corporates/ HUF/ LLP/ Partnership/ Trust/ Sole Proprietorship can apply for loan against mutual funds of up to Rs. 1000 crore, by reaching us at las.support@bajajfinserv.in.
How to apply for a loan against mutual funds
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Frequently asked questions
The eligibility criteria to apply for a loan against mutual funds are:
- Securities: You should have a minimum share of Rs. 50,000.
- Ownership: You should be the owner of the securities and have clear and marketable title to them.
- Age: You should fall under the age bracket of 18 to 90 years.
- Type of mutual funds: Your funds should be under the approved list of 5000 + funds.
Some of the documents required to apply for loan against mutual funds are:
PAN card
For KYC verification you need either of these documents: Aadhaar, passport or voter’s ID.
Along with this you need to provide a copy of the mutual fund statement, which shows the value of your mutual fund holdings.
A loan against a mutual fund works by allowing investors to borrow money against the value of their mutual fund holdings. This type of loan is also known as a "loan against securities" or "margin funding."
To obtain a loan against a mutual fund, investors must pledge their mutual fund units as collateral with the lender. The lender will then lend a certain percentage of the value of the mutual fund units, which can typically range from 50% to 80%. The loan amount and interest rate will vary depending on the mutual fund and the lender.
The loan can be used for any purpose, such as for personal or business expenses, or for investing in other securities. The borrower will be required to pay interest on the loan amount, typically at a higher rate than the mutual fund's returns. The borrower will also be required to repay the loan within a specified period, which can range from a few months to a few years.
If the borrower is unable to repay the loan, the lender may sell the pledged mutual fund units to recover the loan amount. Therefore, investors must carefully consider the risks involved before opting for a loan against a mutual fund.
To avail a loan against mutual funds, an individual must be between 18 to 90 years of age.
