Partner Helpdesk

1. What is Loan Against Mutual Funds?"

A Loan Against Mutual Fund (LAMF) is a financial product that allows investors to borrow money from a financial institution using their mutual fund units as collateral. This type of loan is secured against the value of the investor's mutual fund holdings. It is a form of secured lending where the mutual fund units serve as a guarantee for the repayment of the loan.

2. What are the eligibility criteria to apply for Loan Against Mutual Fund?

a. The loan can be availed only by Resident Indians who are aged between 18 years to 75 years.

b. Minimum credit score of the Client should be 500 and/or new to credit. Cases with a credit score below 500 are approved manually after checking the credit history.

c. Investments in single name or joint name with “Either/ or” mode of operation.

d. Bank Account with net banking/ debit card for creation of NACH mandate.

3. What are the Minimum or Maximum Loan Amount?

• For Loan Repayment Client need to check daily maximum limits permitted by its Bank. Disbursal window is 8:00 am to 5:00 pm except on Bank Holidays.

4. How is it different from other loans?

Unlike some loans that might require property or a steady income or a credit score as security, a loan against mutual funds uses your investments as collateral. Additionally, you only pay monthly interest on the borrowed amount, and you can choose when to repay the principal. 

5. How long will the application process and disbursement take?

If you meet the loan eligibility criteria and have sufficient mutual fund holdings to avail a loan, the entire process from application to disbursement should be completed in 2 working hours.

6. How are my mutual funds impacted?

After you avail a loan, your mutual funds will be pledged as collateral to the lender. You can continue to invest and earn returns/dividends, but you won’t be able to sell/redeem your mutual funds.