Loan Against Mutual Funds

 

A Loan Against Mutual Funds (LAMF) allows investors to borrow money by pledging their mutual fund holdings as collateral. This type of loan provides liquidity without requiring the sale of investments.

Key Features of Loan Against Mutual Funds

• Loan Amount: Typically up to 50-90% of the mutual fund value.
• Interest Rate: Lower than personal loans since mutual funds act as collateral.
• Repayment Flexibility: Interest is charged only on the amount utilized.
• No Need to Sell Funds: Investors continue earning returns on their mutual funds.
• Quick Processing: Minimal documentation and fast approval.

Top Providers Offering Loan Against Mutual Funds

1. SBI – Offers online loans against mutual fund units with a minimum loan amount of ₹25,000.
2. HDFC Bank – Provides loans against mutual funds, shares, LIC policies, and bonds.
3. Bajaj Finserv – Offers loans up to ₹1,000 crore, covering over 5,000 approved funds.