AMFI-registered Mutual Fund Distributor · ARN 348738
Loan Against Mutual Funds
A loan against mutual funds lets you borrow by pledging your mutual fund units to a lender, instead of redeeming them. We facilitate these loans through agreements with established partner lenders. The lender decides eligibility, terms and approval.
How it works
- You choose which units to pledge. The lender marks a lien on them through the registrar, and you stay the owner of the units.
- The lender sets a loan limit as a percentage of the units' value. This percentage differs by lender and by scheme category.
- You borrow as needed and repay as per the lender's terms. Interest is usually charged on the amount actually used.
- When the loan is repaid, the lien is removed.
Who it may suit
Someone who needs temporary cash and wants to avoid selling long-term investments. Pledging units is not a sale. If a lender sells pledged units to recover its dues, that sale is treated as a redemption.
Risks and costs
- Margin calls. If the value of the pledged units falls, the lender can ask you to pledge more units or repay part of the loan, and can sell units if you do not.
- Cost. Interest and fees apply, and the cost of borrowing can be higher than what your investments earn.
- Not for investing on borrowed money. A loan against units is meant for liquidity needs, not for leveraging market investments.
- Only schemes approved by the lender can be pledged.
Loans against mutual funds are provided by lenders under their own terms. If the value of pledged units falls, units may be sold. See Disclaimers.
Questions people ask
Will my SIPs and investments continue?
Your units remain invested and their value moves with the market while pledged. Existing SIPs continue unless you change them.
Do you give the loan?
No. The loan is given by the partner lender. We help with information, documents and coordination.
Do you quote interest rates?
Rates and charges are set by the lender and change over time, so we share them in the lender's own documents.