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:
a. Passport
b. Driving License
c. Voter’s Identity Card
d. Aadhaar
e. Job Card issued by NREGA
f. Letter issued by the National Population Register - 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.
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.
The lender may charge a processing fee for the loan, which is usually a percentage of the loan amount. When availing a loan against mutual funds with Bajaj Finance Limited, you shall incur a processing fee of up to 4.72% of the loan amount (inclusive of applicable taxes).
You can avail a loan of upto Rs. 1000 crores against your mutual funds through Bajaj Finserv.
