Need funds but do not want to disturb your investment flow? A loan against SIP (Systematic Investment Plan) could be your smartest move. Instead of liquidating your growing mutual fund investments, you can get immediate liquidity by pledging them as collateral keeping your long-term financial plans on track while handling urgent expenses.
Access funds without breaking your investment cycle. Pledge your mutual fund and get liquidity when you need it most. Apply now
What is a Systematic Investment Plan (SIP)?
Think of a SIP as your financial gym, where discipline pays off. A Systematic Investment Plan allows you to invest a fixed amount regularly in mutual funds or stocks. Over time, this habit helps you build significant wealth using the power of compounding and rupee cost averaging. It’s simple, flexible, and designed for long-term growth.
What is a loan against SIP and how does It work?
Imagine needing funds urgently but your mutual funds are performing well, and you don’t want to redeem them. That’s where a loan against SIP helps. You can pledge your SIP units as collateral, and the lender will offer a loan based on their market value usually up to 90% of the value. Your SIP continues to grow while you meet your immediate cash needs.
The loan amount you can avail against your SIP investments is determined by the following factors:
- Net Asset Value (NAV) of the Mutual Funds: The current market value of your mutual fund units is crucial.
- Loan-to-Value (LTV) ratio: Lenders typically offer loans against a certain percentage of the total value of your SIP investments. This percentage, known as the LTV ratio, varies between 80% to 90%, depending on the type of mutual fund and the lender's policies.
- Type of Mutual Fund: Different types of mutual funds have different LTV ratios. For instance, equity mutual funds may have a lower LTV ratio compared to debt mutual funds.
For example, if your SIP corpus is worth Rs. 10 lakh, and the lender offers a 90% Loan-to-Value (LTV) ratio, you can avail up to Rs. 9 lakh as a loan.
Keep your investments intact, and still get the funds you need borrow against your mutual fund without a second thought. Apply now
It's important to note that the final loan amount may also be influenced by factors like your credit score, income stability, and the lender's specific policies.
Why choose a loan against SIP?
A loan against SIP (Systematic Investment Plan) is an efficient way to unlock liquidity without disturbing your long-term wealth creation journey. Instead of redeeming your mutual funds, you simply pledge them and continue benefiting from market growth while accessing funds when needed. Here are the key reasons to choose a loan against SIP:
- Keep your investments intact
You don’t need to sell your mutual fund units. Your SIP continues to grow and compound, helping you stay aligned with long-term financial goals. - Continue earning returns
Even while the units are pledged, they remain invested in the market, allowing you to benefit from potential appreciation and dividends. - Lower interest rates than personal loans
Since this is a secured loan backed by your SIP investments, lenders typically offer more competitive interest rates compared to unsecured loans. - Quick access to funds
With minimal documentation and digital processes, loans are often approved and disbursed quickly—ideal for emergencies or short-term needs. - No capital gains tax trigger
Because you are not redeeming your mutual funds, you avoid exit loads and capital gains tax that would otherwise apply on withdrawal. - Flexible repayment options
Many lenders offer overdraft-style facilities, meaning you pay interest only on the amount utilised and can repay as per your convenience. - Access to higher loan amounts
You can typically borrow around 50%–80% of your SIP portfolio value, depending on the type of mutual funds and lender policies.
In simple terms, a loan against SIP lets you borrow smartly without breaking your investment momentum—making it a practical option for both urgent needs and strategic liquidity planning.
