Interest rate and charges
The following charges are applicable on loan against securities:
Types of fees |
Charges applicable |
| Interest rate |
8% to 12% per annum |
| Processing fee |
Up to 4.72% of the loan amount (inclusive of applicable taxes) |
Prepayment charges |
Full pre-payment –
Part pre-payment -
Note: If the primary borrower is an individual or Micro & Small Enterprises (MSEs) with or without a co-borrower and the loan is availed on floating rate of interest, then there will be no foreclosure/part-prepayment Charges applicable, irrespective of the source of funds used for pre-payment of loans, either in part or in full, and without any minimum lock-in period. |
| Annual maintenance charges/ renewal fee | Up to 1.18% (inclusive of applicable taxes) on the sanctioned amount |
Bounce charges |
Rs. 1200/- per bounce. |
Penal charge |
Delay in payment of instalment(s) shall attract penal charge at the rate of 18% per annum per installment from the respective due date until the date of receipt of the full instalment(s) amount. |
Brokerage charges* |
As applicable at actuals |
Pledge confirmation charges |
Up to Rs. 59 per ISIN (Inclusive of Applicable Taxes) |
Pledge invocation charges |
0.02% (Minimum Rs. 65 and Maximum Rs.1186) (Inclusive of Applicable Taxes) + Stamp duty as applicable by the depository participant |
Demat share transfer charges (post invocation) |
0.02% (Minimum Rs. 65 and Maximum Rs. 1186) (Inclusive of Applicable Taxes) |
Legal charges |
Recovery of charges |
| Lien charges | Up to Rs. 590 (Inclusive of Applicable Taxes) |
| Un-lien charges | Up to Rs. 590 (Inclusive of Applicable Taxes) |
*Charges levied by Broker to BFL and the same is being passed on to the clients.
How to apply for a loan against mutual funds
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Frequently asked questions
Loan Against mutual funds with Bajaj Finance Limited is available to customers at an interest rate of 8% p.a. to 12% p.a.
There is a full prepayment charge up to 4.72% (inclusive of applicable taxes) on the outstanding loan amount as on the date of full prepayment and there is part-prepayment charge up to 4.72% (inclusive of applicable taxes) of the principal amount of loan prepaid on the date of such part-prepayment.
Yes, there is a processing fee of up to 4.72% of the loan amount (inclusive of applicable taxes), when applying for a loan against mutual funds. This fee covers the costs associated with processing your loan application. It is important to carefully review the terms and conditions of the loan agreement to understand all fees and charges associated with the loan.
The rate of interest for loan against mutual funds may vary from lender to lender. Ensure you check for precise terms and conditions before borrowing. Bajaj Finance offers loan against mutual funds at an interest rate of up to 15% per annum.
The loan-to-value (LTV) ratio for a loan against mutual funds with Bajaj Finance is up to 90%. The actual LTV ratio may vary depending on the lender and the specific terms and conditions of the loan.
Individuals who are KYC-compliant and own eligible mutual fund units in their name can apply. Both salaried and self-employed individuals can avail of this facility, subject to the lender’s terms and conditions.
Yes, you can. A loan against mutual funds allows you to pledge your units as collateral without redeeming them, so you continue to retain ownership and potential growth benefits during the loan tenure.
Both debt and equity mutual funds are generally eligible, depending on the lender’s approved list. Typically, funds from SEBI-registered AMCs with stable performance are preferred for pledging.
Once your mutual fund units are successfully pledged, the loan amount is usually disbursed within 24 to 48 working hours. Some NBFCs and banks offer instant approval and quicker online disbursal.
A high CIBIL score is usually not required since the loan is secured. However, your repayment behaviour is still reported to credit bureaus, so defaults or delays can impact your score over time.
The Loan-to-Value (LTV) ratio for mutual funds depends on the type and market value of the units you pledge. Equity funds generally offer a slightly lower LTV than debt funds because they carry higher market volatility.
Once the pledge of mutual fund units is confirmed and the loan is approved, the funds are usually disbursed quickly, often within a few hours. The exact timeline may vary depending on verification and operational processes.
Yes. When you take a loan against mutual funds, ownership remains with you, so your units continue to earn returns. However, pledged units cannot be redeemed until the loan is fully repaid or the pledge is removed.
Most lenders allow part-prepayment or full foreclosure of a loan against mutual funds without penalty. Interest is typically charged only on the utilised amount, helping you reduce overall interest costs by repaying early.
Your mutual fund units continue to remain invested. Dividends, bonus units, and market appreciation are credited to you as usual, unless restricted by fund-specific rules. Only a lien is marked; ownership remains unchanged.
In case of default, the lender may sell part or all of the pledged mutual fund units to recover dues. A margin shortfall due to market movements may also trigger additional collateral or partial liquidation.
Yes. Equity mutual funds usually have lower loan-to-value ratios due to higher volatility, while debt mutual funds offer higher LTVs and relatively stable valuations, often resulting in slightly better borrowing limits and risk comfort.
Typically required documents include PAN card, identity and address proof, bank account details, and mutual fund holding statements. Many lenders complete the process digitally through OTP-based consent and online lien marking.
The tenure usually ranges from 7 days to 36 months, depending on the lender’s terms. Some lenders offer flexible repayment options with an overdraft facility, allowing borrowers to pay interest only on the utilised amount during the tenure.
If the mutual fund’s market value falls significantly, the lender may issue a margin call. You may need to pledge additional units or partially repay the loan to maintain the required loan-to-value ratio and avoid forced liquidation.
You can release your pledged mutual funds once the outstanding loan amount, including interest and charges, is fully repaid. In some cases, partial release may be allowed if sufficient collateral remains to maintain the required margin.
No, NRIs generally cannot apply for a loan against mutual funds. Such loans are typically offered to resident Indians, subject to KYC norms and domestic regulatory guidelines.
